After the close (08/06/19) RRR reported 2Q earnings and hosted their call. Adjusted EBITDA was $115M, or ~$126M excluding one-time pre-opening related costs that will not recur in 3Q. This compares to consensus of $124M and our $119M estimate.
Search Coverage List, Models & Reports
Search Results1-8 out of 8
June Vegas Strip GGR was released this morning which showed a surprising increase of +17.7% y/y versus our expectation of -2.0% y/y driven by very high hold. Had the month played in line with normal hold then the result would still have been up around 5% y/y, ahead of our expectations. June Vegas Strip RevPAR was then released this afternoon which showed an increase of 4.8% y/y, which was below our expectation of around 10%. Overall, it was a good month for the Strip, and it appears 2H is shaping up well per MGM, and we believe 2020 is setting up to be a strong year, too, with many tailwinds.
For our Weekly Sho we've recorded a 20-minute video with 36 slides highlighting our current views as we head into another earnings season. The cruise line section begins at 4:03, the lodging section begins at 9:00, and the gaming section begins at 15:40. Enjoy the rest of your weekend!
May Vegas Strip GGR was released this morning which showed a decline of -11% y/y – entirely driven by continued weak baccarat play – below our expectation of -5% y/y. Had the month played in line with normal hold the result would have been in line with our expectation. Strip RevPAR was released this afternoon which showed an increase of 7.3% y/y, above our expectation of flattish. For the entire 2Q we estimate CZR Vegas revenue to be flat y/y and MGM Vegas revenue to be down slightly y/y. MGM Vegas and total consensus EBITDA for 2Q still seems too high to us, and CZR Vegas and total consensus EBITDAR for 2Q generally seems OK to us.
In this week’s piece we discuss 1) our observations of investor sentiment and feedback following our regional gaming initiation, 2) our thoughts on insider selling activity in the cruise line space, 3) our thoughts on insider purchase activity at MGM, and 4) China total social financing for May, and the implications for Macau GGR. Please click the link above for the full report.
We are initiating coverage of RRR with a Peer Perform rating. RRR is an interesting story, but we’re initiating with a Peer Perform rating largely because of our concerns that consensus estimates may be too aggressive with difficulty forecasting the Palms ramp, and valuation seems reasonable.
Wolfe Research Senior Leisure, Gaming & Lodging Senior Analyst, Jared Shojaian, hosted a webcast to discuss his initiation on the regional gaming industry. Topics included why BYD is our top idea in regional gaming, upside and risks from a potential ERI+CZR combination, what to expect with these businesses later in the cycle, the bull/bear debates for each stock, and the sports betting opportunity.