Imperial Capital Raises Price Target on Churchill Downs (CHDN) Ahead of 3Q Report
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Imperial Capital reiterated an Outperform rating on Churchill Downs (NASDAQ: CHDN), and raised the price target to $165.00 (from $145.00), ahead of the company's 3Q earnings report. For the third quarter, Imperial expects Churchill Downs to report a decline of 7.1% in EBITDA due entirely to the company continuing to invest in its Big Fish Games segment.
Analyst Gregg Klein commented, "We are maintaining our Outperform rating on CHDN shares while raising our one-year price target to $165 from $145, approximately 16% above the recent share price. The company is being valued at an 8.3x total enterprise value, based on our 2017 earnings estimates, which is slightly below the mean of the select gaming comparables that we analyze. We are valuing the CHDN shares on a sum-of-the-parts analysis, with multiples ranging from 7.5x for its casino division to 11.0x for Big Fish Games. Our one-year price target of $165 per share values the company at 9.0x our 2017E earnings, which we think is appropriate."
Shares of Churchill Downs closed at $142.39 yesterday.
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