Churchill Downs Intrinsic Value – Jefferies Favors Churchill Downs Despite Investigation Into Horse Deaths
June 21, 2023
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Jefferies, a global financial services firm, continues to have a favorable view of Churchill Downs ($NASDAQ:CHDN) despite the ongoing investigation into horse deaths. Churchill Downs is a leading American horse racing company best known for hosting the famous Kentucky Derby. The company operates several tracks across the United States in addition to providing online betting services and operating other gaming and entertainment venues. Despite the recent investigation into the cause of horse deaths at their racetracks, Jefferies believes that Churchill Downs is still a strong stock to consider investing in. Jefferies recently released a report stating that Churchill Downs stock was a “buy” despite the investigation.
They believe that the company is doing everything it can to address the issues and is committed to ensuring the safety of the horses and jockeys competing at their tracks. The report also notes that Churchill Downs has a proven track record of successfully managing its operations and has favorable long-term prospects. The financial services firm believes that the company has done a good job in addressing the issue and remains positive about the long-term prospects of the stock. With that in mind, Jefferies continues to recommend investing in Churchill Downs.
Stock Price
On Monday, Jefferies, an investment banking firm, was positive on CHURCHILL DOWNS despite the ongoing investigation into a number of horse deaths at the racetrack. CHURCHILL DOWNS stock opened at $140.3 and closed at $133.5, a drop of 6.1% from the previous day’s closing price of $142.2. Jefferies analysts acknowledged the investigation but still remained bullish on the company’s long-term prospects due to its strong track record and leading position in the horse racing industry. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Churchill Downs. More…
| Total Revenues | Net Income | Net Margin |
| 2.01k | 553 | 16.0% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Churchill Downs. More…
| Operations | Investing | Financing |
| 617.5 | -2.99k | 2.25k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Churchill Downs. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 6.27k | 5.57k | 18.81 |
Key Ratios Snapshot
Some of the financial key ratios for Churchill Downs are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 15.0% | 33.4% | 47.4% |
| FCF Margin | ROE | ROA |
| 4.1% | 94.5% | 9.5% |
Analysis – Churchill Downs Intrinsic Value
At GoodWhale, we have conducted an analysis of the wellbeing of CHURCHILL DOWNS. Our proprietary Valuation Line has assessed the intrinsic value of CHURCHILL DOWNS shares to be around $143.2. However, the current price of the stock is $133.5, which is a fair price but it is still slightly undervalued by 6.8%. This presents a good buying opportunity for investors who wish to take advantage of the slightly lower price and benefit from the potentially higher returns that might come from any future appreciation in the stock’s value. More…
Peers
It is headquartered in Louisville, Kentucky, United States. The company was founded in 1875 by Col. Meriwether Lewis Clark Jr. As of 2019, Churchill Downs Inc operates six horse racing facilities, including the world-renowned Churchill Downs Racetrack. The company also owns and operates the Kentucky Derby Museum and the Kentucky Oaks Museum. In addition to horse racing, Churchill Downs Inc also offers gaming and entertainment experiences through its subsidiaries, including Big Fish Casino, Fair Grounds Race Course & Slots, and Hawthorne Race Course.
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Summary
Churchill Downs Incorporated (CDI) is currently the subject of an investigation related to horse deaths. The company has seen its stock price decrease as a result.
However, the company remains favorably viewed by analysts at Jefferies. Despite the recent negative news, they maintain their Buy rating, citing that CDI has greater long-term value than is reflected in its current stock price. They suggest that investors look beyond the short-term impact of the investigation, and remain bullish on the company’s future prospects. CDI is a leading operator of racetracks, online wagering services, and casinos throughout the United States. Despite the current investigation, analysts remain confident in the company’s financial strength and prospects for further growth.
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