Century Casinos Could Get Lift from Missouri, Nevada Casinos

Shares of Century Casinos (NASDAQ: CNTY) surged nearly 36% this month, but some analysts believe the stock could have more upside ahead of it thanks to contributions from the operator’s Missouri and Nevada gaming venues.

In a note to clients today, Stifel analyst Jeffrey Stantial reiterated a “buy” rating on the stock with a $5 price target, implying upside of 10.1% from the Nov. 29 close. He pointed to a strong start for Century’s revamped property in Caruthersville, Mo. and revenue normalization at the Nugget in Sparks, Nevada as potential catalysts for the shares. The analyst recently met with Century Co-CEO & Vice Chairman, Peter Hoetzinger.

CNTY’s recently completed $52 million Caruthersville boat-to-land conversion was a key focus across meetings attended, with management citing stronger than expected visitation/spending trends during the first three weeks post-opening,” observed Stantial.

Last month, the Missouri Gaming Commission (MGC) approved the move for what was the last riverboat casino in the state, paving the way for the refreshed property to gaming venue, including a new hotel, to open on Nov. 1.

Signs of Normalization for Century in Nevada

Century acquired the Nugget Sparks casino in early 2022, marking the operator’s initial foray into Nevada. Initially, Century struggled with the property, encountering headwinds via periods of bad weather and heavy promotional activity by rivals.

“Encouragingly, CNTY noted consistent sequential improvement from August through October, with margins likely back to more normalized ~30% level exiting Q3. Looking forward, management noted revenue growth is underpinned by strong market fundamentals & improving group & convention room nights,” added Stantial.

Nugget’s prior owners left something to be desired regarding convention and group meeting bookings, but that’s an area of strength for Century. Stantial pointed out that benefits on that front could accrue in late 2025 or early the following year.

Poland Asset Sale Still on the Table

The long-rumored sale of non-core Poland gaming assets could be back in play for Century following that country’s recent relicensing process. Century’s Casinos Poland unit, in which it controls a two-thirds stake, has six licenses and five of those permits are good through 2028.

Stantial said that stability has renewed interest among potential suitors, though none were named. Transactions in Poland could go a long way toward boosting Century’s cash on hand profile.

“Based on the local regulatory framework, we believe a 4-5x purchase multiple is reasonable implying pro-rata proceeds of ~$30 million likely allocated to paydown on the term loan. While only providing modest interest relief, we believe a sale of lower-multiple Poland assets should help simplify the thesis for U.S. focused investors,” concluded Stantial.