UPDATE: BofA Securities Downgrades Red Rock Resorts (RRR) to Underperform

BofA Securities analyst Shaun Kelley downgraded Red Rock Resorts (NASDAQ: RRR) from Neutral to Underperform with a price target of $50.00 (from $54.00).

The analyst comments "We lower Red Rock Resorts (ticker: RRR) to Underperform from Neutral and lower our PO to $50 from $64. Regionals begin to lap tough comps in 2Q following a very strong 2021. Las Vegas Locals (RRR’s core market) meaningfully outperformed the broader US with Gaming revenue +25% above pre-COVID levels in 2Q-3Q, creating some of the toughest comps among its peers. Labor inflation is also a bigger concern in Las Vegas than regionals due to a higher proportion of fixed operating expenses. While RRR’s balance sheet and leverage are attractive, we believe excess free cash flow (FCF) and the Palms proceeds will be mostly targeted at development capex (e.g. Durango). We maintain estimates with our new PO translating to an 8% FCF yield on 2022-2023 estimates, in-line with regional Gaming peers."

For an analyst ratings summary and ratings history on Red Rock Resorts click here. For more ratings news on Red Rock Resorts click here.

Shares of Red Rock Resorts closed at $50.42 yesterday.

You May Also Be Interested In

• Fiserv (FISV) PT Lowered to $60 at Freedom Broker
• Freedom Broker Upgrades Lifeway Foods (LWAY) to Buy
• Zedcor Inc (ZDC:CN) PT Raised to Cdn$7.75 at Desjardins