Skip to main content

Market Overview

Recent Downside In Churchill Downs Is 'Overdone,' Hilliard Lyons Upgrades To Buy

Share:

The 11.8 percent sell-off in Churchill Downs, Inc. (NASDAQ: CHDN) in the past month could be a buying opportunity for patient investors.

Hilliard Lyons analyst Jeffrey Thomison has upgraded the stock from Neutral to Buy and sees potential for strong cash flow and revenue growth ahead for Churchill Downs. Thomison urges investors not to get spooked by the company’s recent earnings weakness.

“Recent weakness in the stock price is likely related to mobile videogame developer Big Fish Games, whose Q1 profits were impacted by a boost in user acquisition spending,” he explains.

Related Link: The Kentucky Derby And Doubtful Destiny

Thomison sees a fundamentally strong company with a more diverse business than ever before. He even believes that this year’s Kentucky Derby week could provide upside to Churchill’s Q2 results.

Q1 EBITDA for Churchill Downs climbed 6 percent year-over-year, even with the decline from Big Fish. Thomison sees the company’s potential for revenue and earnings growth coupled with its manageable debt load and potential for deleveraging as a winning recipe for investors. Churchill Downs’ debt at the end of Q1 stood at $987.2 million, 61 percent of total capitalization.

Thomison also predicts that the company will increase its annual dividend and share buyback plans.

In addition to the upgrade, Hillaard Lyons now has a $150 price target on Churchill’s stock.

Disclosure: the author holds no position in the stocks mentioned.

Latest Ratings for CHDN

DateFirmActionFromTo
Mar 2021KeyBancMaintainsOverweight
Jan 2021KeyBancInitiates Coverage OnOverweight
Sep 2020SusquehannaUpgradesNeutralPositive

View More Analyst Ratings for CHDN
View the Latest Analyst Ratings

 

Related Articles (CHDN)

View Comments and Join the Discussion!

Posted-In: Hilliard Lyons Jeffrey Thomison Kentucky DerbyAnalyst Color Upgrades Price Target Analyst Ratings

Latest Ratings

StockFirmActionPT
LBCredit SuisseMaintains36.0
TRGPCredit SuisseMaintains40.0
SNOWCredit SuisseMaintains275.0
DARCredit SuisseMaintains95.0
CLRMKM PartnersDowngrades26.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com