BofA Initiates Coverage On Red Rock Resorts With A Buy Rating

Shaun C. Kelley of Bank of America initiated coverage on

and set a price target of $24. Red Rock is the leading casino operator with 19 casino properties under its belt and is the manager of two Native American casinos. The company is a "near pure play investment on the Las Vegas Locals market" Kelley stated. The local market is rebounding with a positive macro environment potential and near no supply growth other than Red Rock. "The company's revenue and EBITDA are still 22% and 30% below last cycle's peak offering recovery potential" Kelley said. New growth is possible with the company's acquisition of Palms. Red Rock also has land holdings can also be capitalized for new developments. And a tribal management agreement in North Folk could increase RRR $1-1.50 per share. Potential for growth beyond last year's number is plausible as Red Rock continues to consolidate its position in a positive local market.