Churchill Downs beats Q2 revenue expectations, announces $500 mln buyback

Overview

• Churchill Downs Q2 revenue rises 5% to $934.4 mln, beating analysts' expectations

• Adjusted EBITDA reaches record $450.9 mln, up 1% from prior year

• Co announces $500 mln share repurchase program

Outlook

• Company expects favorable impact from new federal tax provisions on cash flow

• Company to acquire 90% of Casino Salem for $180 mln

• Company to develop gaming, entertainment destination in Salem, NH

Result Drivers

• KENTUCKY DERBY - Record wagering during Derby Week and increased licensing/sponsorship revenue boosted results

• HRM VENUES - Revenue growth driven by Virginia and Kentucky HRM venues, with notable increases from Northern Virginia and Louisville

• GAMING DECLINE - Gaming segment revenue fell due to cessation of operations in Louisiana and higher state gaming taxes

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 12 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the casinos & gaming peer group is "buy"

• Wall Street's median 12-month price target for Churchill Downs Inc is $132.56, about 18.5% above its July 22 closing price of $108.06

• The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 17 three months ago

Press Release: ID:nGNX64YPrv