Wells Fargo Sends International Speedway, Speedway Motorsports To The Pit

Speedway Motorsports, Inc. TRK and International Speedway Corp ISCA were downgraded Monday by Wells Fargo. 

The Analyst 

Timothy Conder downgraded Speedway Motorsports from Market Perform to Underperform and maintained a $16 price target.

The analyst downgraded International Speedway from Market Perform to Underperform and kept a $41 price target.

The Thesis

The downgrade of International Speedway comes as Conder said he sees no upside to the share price given the pending minority shareholder approval of a $45-per-share cash acquisition offer by NASCAR for the 25% of voting shares not controlled by the France family.

Once the deal is approved, it will likely close over the next three to six months, the analyst said — and he does not see any additional considerations above the $45/share offer as being forthcoming. (See Conder's track record here.) 

“Our core investment thesis of a mature sport, requiring material multiyear reinvestment and need to expand the fan base, remains intact." 

Speedway Motorsports is unlikely to see upside from its current share price, despite Sonic Financial’s $18-per-share offer to acquire the minority shares not owned by the Smith family, Conder said in a separate Monday downgrade note. 

The deal is being reviewed by a special committee of independent directors from the company’s board, the analyst said. 

It is highly likely the board will ultimately approve Sonic’s offer give the premium offered and implied valuation relative to continuing challenging company-wide and industry fundamentals, according to Wells Fargo. 

Price Action

International Speedway shares were down 0.75% at $45.01 at the time of publication Monday, while Speedway Motorsports shares were down 0.64% at $18.59. 

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