Truist Analyst Shares Insights, Finds Gaming Stocks Uninspiring

An expert analyst recently pointed to the underperforming gaming stocks when compared to the S&P Index and discussed a range of challenges and developments within the sector.

Investors Lack Enthusiasm for Gaming Stocks

That is the take of Truist Securities analyst Barry Jonas, who was recently quoted by CDC Gaming. In a Wednesday note to investors, the expert revealed that while there are no longer fears about significant downturns in gaming stocks, investors lack enthusiasm. Considering the steady but “uninspiring” gaming stocks, Jonas adjusted a range of price targets. While the analyst increased the price targets for some companies in the sector, he decreased the targets for others.

Notably, Jonas raised the price targets for Everi Holdings from $10 to $14.25, for Monarch Casino Resorts from $75 to $82 and Boyd Gaming from $75 to $77 per share. On the other hand, Light & Wonder’s price target dipped from $120 to $115, while a decrease was observed in the price target for MGM Resorts from $58 to $56. The analyst confirmed a decrease for Station Casinos and Penn Entertainment’s price targets from $63 to $58 and from $25 to $23 respectively.

The Expert Is Optimistic About the Digital Sector

Focusing on Las Vegas, Jonas said that the market represents “somewhat of a question mark.” While the expert pointed to challenges, he acknowledged strong attendance during the Consumer Electronics Show and further developments related to the Tropicana and The Mirage.

Truist’s analyst was rather skeptical regarding the upcoming fourth quarter for Las Vegas, particularly “given the importance of the second annual F1 race that is well-known to be tracking behind on bookings.” He pointed to concerns shared by Caesars Entertainment regarding room bookings, predicting that those issues may affect MGM Resorts too.

On the bright side, Jonas was optimistic about the growth in the digital vertical. He positioned DraftKings as the leader in that sector, considering the operator’s “superior tech, strong customer acquisition trends, and meaningful (free cash flow) generation in the coming years.” Although optimistic, the expert was more conservative when it comes to cash flow, predicting $380 million in 2024 for DraftKings, a figure that is below Wall Street’s estimated $395 million.