Analyst recommends retaining Golden Entertainment stock

August 1, 2023
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The expert is confident that its newly renovated property can produce higher profits for the end of the year.

Following Golden Entertainment’s most recent financial quarterly report, one B Riley Securities analyst has advised shareholders to continue investing in the company’s stock. During the group’s second quarter, Golden Entertainment reported $286.7m in revenue, $12.3m in net income and $58.4m in adjusted EBITDA.

The group is currently renovating one of its properties, The Strat, which it hopes will be open next month. Golden Entertainment reported that it completed a renovation for more than 500 rooms near Strat’s pool area in the second quarter.

One analyst, David Bain, noted the impact ongoing construction has made on Golden Entertainment’s quarterly figures but recommends keeping shares due to a potential upswing in earnings during the fourth quarter.

He commented, “As previewed, Strat construction disruption and general labor increases had a negative impact. The worst of construction disruption is behind The Strat, and labor increases are now in our/consensus estimates in our view.

“Further, we believe The Strat is positioned for potential 4Q/2024 earnings upside as it captures significant upcoming City and North Strip catalysts. We maintain our buy and would particularly be buyers on potential stock weakness out of 2Q results.”

Golden Entertainment recently signed a definitive deal with J&J Ventures Gaming to “divest its distributed gaming operations” in the states of Nevada and Montana. The two agreed to the transaction for an aggregate cash consideration of $322.5m, along with another $39m of estimated purchased cash once the deal is completed.

Under the terms of the agreement, J&J Ventures will support Golden’s branded Nevada tavern destinations’ gaming operations at “financial terms consistent with the company’s past practice.”

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