Full House Resorts Could Be Earnings Winner Thanks to New Casinos

Full House Resorts (NASDAQ: FLL) could deliver earnings per share (EPS) growth this year, as the operator opens two new casinos to the public.

That’s the sentiment of CBRE analyst John DeCree, who restarted coverage of the regional casino company today with a “buy” rating and a $14 price target. That implies upside of 64.7% from the Wednesday close, and a 7.5x multiple to the gaming firm’s fiscal 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA) estimates.

On a conference call last November, Full House CEO Dan Lee said American Place will be larger than the current version of the company combined, and it’s possible that will be true of the temporary venue as well. In addition to American Place and Chamonix, Full House runs a pair of gaming properties in Nevada, one in Indiana, Bronco Billy’s in Cripple Creek, and the Silver Slipper in Mississippi.

Full House Could Deliver for Investors this Year

Some analysts believe Full House is the next regional gaming operator of scale, following in the footsteps of the likes of Bally’s (NYSE: BALY), Golden Entertainment (NASDAQ: GDEN), and Eldorado Resorts, which is now Caesars Entertainment (NASDAQ: CZR).

While those are bold comparisons, it’s not out of the realm of possibility that Full House will one day be closer to those rivals in terms of size. American Place and Chamonix will figure prominently in that effort.

With a significantly improved EBITDA and asset base following these two new openings, FLL should reach critical scale, gaining considerably more financial flexibility with greater operating synergies and more efficient access to capital. This will allow the company to continue its growth trajectory beyond these two projects,” wrote CBRE’s DeCree.

Regarding American Place, some analysts estimate the project could add $55 million to Full House’s EBITDA, and as much as $4 to the operator’s share price over the long term.

New Full House Casinos Have Advantages

Both American Place and Chamonix have perks that could propel Full House’s earnings power. The Illinois venue is located outside the Chicago suburbs in an area where casino penetration is relatively low. That indicates the operator could enjoy geographic benefits.

Prior to today, five analysts covered Full House, all with “buy” or “strong buy” ratings. The average price target on the shares was $12.20.