SunTrust Reiterates Buy Rating on Red Rock Resorts (RRR) Following 1Q
SunTrust analyst Neal Dingmann reiterated a Buy rating and $14.00 price target on Red Rock Resorts (NASDAQ: RRR) following the company's 1Q report. RRR reported a Q1 EBITDA miss. Cited run-rate cost cuts were more pronounced than what had been modeled, with an implied >36 month zero revenue liquidity profile well-above peer average.
In order to reduce cash outflow, management has implemented meaningful cost-cutting measures, with cited burn-rates well below our prior estimates. Management noted an all-in burn rate of ~$24M/month under full casino closures. Once casinos are reopened, management estimated they could hit EBITDA breakeven at ~35-45% of overall 2019 net revenues.
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Shares of Red Rock Resorts closed at $10.90 yesterday.