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Gaming Stocks to Consider After Macau Revenues Rise

Christopher Vargas

Global economic worries have circulated as the enthusiasm from the temporary tariff ceasefire between the U.S and China fades. Even though trade deal talks are set to resume between the two countries, any agreement is likely further down the line.

Despite some uncertainty in the current economy, investors have still decided to bet on gaming stocks. News of the U.S and China agreement to hold off tariffs while they resume trade negotiations sent gaming stocks such as Wynn Resorts WYNN up by as much as 4.34%. In addition, Casino stocks increased after Macau, China’s only city in which gambling is allowed, reported a jump in revenue. Despite an economic slump in China, people still flocked to the gambling capital, sending revenue up 6% last month from a year earlier.

What gaming stocks can also reel in some solid returns? Let’s take a further look into which gaming stocks hold stand out growth potential.

Las Vegas Sands

The gaming company has been operating casinos in Macau since 2002 and saw its stock rise 4.9% in response to the strong revenue report. Las Vegas Sands LVS is currently sitting at a Zacks Rank #3 (Hold) and has been able to go up 19.3% on the year. Zacks Consensus Estimates are currently projecting year to year earnings growth of 8.11% to go along with a 2.58% spike in revenue for the current quarter. Estimates are also calling for a 9.04% bottom line jump with a 2.21% sales hike for the current year. Furthermore, the gaming giant is currently trading at 17X its forward earnings, which is at a discount relative to the industry average of 21X forward earnings.

Penn National Gaming

This gaming giant is another stock that has been able to make some solid moves recently. The company is up 10.8% during the past four weeks and is looking to keep its positive strides going. Penn National Gaming PENN is currently a Zacks Rank #2 (Buy) and is looking to build off of some solid revenue projections. Consensus Estimates are currently forecasting a whopping 70.06% revenue surge, along with a 10.53% earnings rally for the next quarter. Year over year earnings are also expected to increase by 53.76% on the back of 47.18% revenue expansion for the current year. Penn National Gaming is also currently trading at a discount relative to its industry and has been for the better part of a year, further cementing its appeal.

Churchill Downs

This gaming stock has been on an absolute tear lately, up 43.9% on the year. Churchill Downs CHDN, the world's most legendary racetrack, has conducted thoroughbred racing and presented America's “greatest race,” the Kentucky Derby. In addition to the Kentucky Derby, the company operates six casinos, Big Fish games, and operates TwinSpries.com which is a video poker business. The gaming company is resting at a Zacks Rank #3 (Hold) at the moment and is coming off a solid quarter. The company was able to surpass our Zacks Consensus Estimate of $0.40 by $0.23, for an EPS surprise of 57.50%. The stock has made it a habit of crushing our Estimates, with an average EPS surprise of 21.30% over the last four quarters. Estimates call for earnings to increase 69.81% on 41.57% revenue expansion for the next quarter. Furthermore, Churchill Downs is expected to see double-digit earnings growth through 2020.

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Wynn Resorts, Limited (WYNN) : Free Stock Analysis Report
 
Churchill Downs, Incorporated (CHDN) : Free Stock Analysis Report
 
Las Vegas Sands Corp. (LVS) : Free Stock Analysis Report
 
Penn National Gaming, Inc. (PENN) : Free Stock Analysis Report
 
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