Bally’s Begins March In A Slump After Analyst Downgrade

Written By Nicholaus Garcia on March 1, 2022
After Analysts Check Bally's Downgrade To Begin Month Later

March begins with shares of Bally’s Corporation ($BALY) trading lower than expected after an analyst downgraded the Rhode Island-based casino operator. 

David Katz, an analyst at Jefferies, lowered his rating on the company to “hold” from “buy.” Katz also dropped his target price on the stock from $54 to $38.

At the time of writing, shares of $BALY were trading at $35.33 per share.

Digital gaming drives Bally’s downgrading

In a note to clients, Katz has this to say,

“Our rating change to Hold from Buy is not driven by the quarter but by the change in the market’s patience for digital gaming profitability and Bally’s anticipated protracted investment cycle in land-based gaming.”

Speaking of the company’s North American arm, Bally’s operates 14 casinos in 10 states, and its Bally Bet sports betting app is available in five.

  • Arizona
  • Colorado
  • Iowa
  • Indiana
  • Virginia

Furthermore, Bally’s is also preparing to launch its mobile app in New York.

Checking in on Bally’s growth and reports

The company missed on both its top and bottom lines, according to its Q4 earnings report. However, Bally’s international unit posted quarter-over-quarter EBITDA, while North American assets lost money. 

The company reported revenue of $547.7 million, with a net loss of $115.3 million compared to a net income of $20.2 million. 

Adjusted EBITDA was $119.4 million, up by $98.4 million year over year. 

Lee Fenton, chief executive officer, said Q4 results represent the first “full quarter” of the consolidated Bally’s group, which includes casinos and resorts, International and North American interactive segments. 

Lee noted:

“During the quarter, we made significant progress on integration of our acquired assets, defining our strategic goals for 2022 and deploying capital strategically including progress in growth projects in Lincoln, Atlantic City and Kansas City. Additionally, we repurchased $87 million of our common shares during the quarter.”

Bally’s North American casino portfolio includes the following locations: 

  • Twin River
  • Tiverton
  • Dover
  • Atlantic City
  • Evansville
  • Hard Rock Biloxi
  • Vicksburg
  • Bally’s Kansas City
  • Bally’s Black Hawk 
  • Shreveport 
  • Lake Tahoe
  • Quad Cities 
  • Bally’s Arapahoe Park

The company estimates revenue for the end of 2022 to range from $2.4 billion to $2.5 billion.

Photo by Michael Vi / Shutterstock.com
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Nicholaus Garcia

Nick has had stints in Chicago and Washington, D.C., writing about politics, financial markets, and sports betting. He graduated from Texas Tech University and completed his master's degree in journalism at Columbia College Chicago.

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