Churchill Downs (CHDN) Benefits From Impressive Derby Week Results - Janney

Janney Montgomery Scott analyst, Brian McGill, reiterated a Buy rating and fair value target of $155 on Churchill Downs (NASDAQ: CHDN), based on a SOTP analysis plus $10 of value for Arlington Park. CHDN released results from the Kentucky Derby week and total EBITDA grew $4.5 mln to $6.0 mln over last year. While the company does not break out the actual EBITDA exactly, this should represent growth of mid to high single digits over last year. This result was a positive given very difficult comps.

For the week, attendance was up 3% over last year to 376,980 people and all sources handle was up 1% to $266.8 mln. Both figures represented record breaking results.

The Kentucky Derby should trade at a 15x multiple. There are debates all the time from investors on the right multiple for certain assets. In this case, it is a mid to high single digit grower, with no competition, and a 142 year history! The 15x multiple is justified and if it was to be put up for sale, it could easily fetch that price.

For an analyst ratings summary and ratings history on Churchill Downs click here. For more ratings news on Churchill Downs click here.

Shares of Churchill Downs closed at $129.21 yesterday.

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