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Posted on: July 31, 2023, 01:51h.
Last updated on: July 31, 2023, 01:51h.
After moving its spring meet following the deaths of 12 horses, Churchill Downs (NASDAQ: CHDN) announced today it will restart racing at its eponymous Kentucky racetrack in September.
Racing will restart at Churchill Downs in Louisville, Ky. on September 14 after it was halted on June 7 and moved to Ellis Park amid concerns the track may have played a role a dozen equine deaths in recent months. It was not substantiated whether or not the track was a cause in any of the fatalities.
Recent investigations by the Kentucky Horse Racing Commission (KHRC) and the Horseracing Integrity and Safety Authority (HISA) didn’t identify a specific factor contributing to the surge in equine deaths at the home of the Kentucky Derby. Likewise, testing of the track indicated the surface is on par with what has been seen in previous years.
The September meet runs through October 1 and features events such as the Road to the 150th Kentucky Derby and 150th Kentucky Oaks Kickoff on Saturday, Sept. 16, among others. Churchill Downs’ fall meet runs from Oct. 29 through Nov. 26.
Churchill Downs Enhancements
The operator is making adjustments in an effort to bolster the safety of horses at its namesake venue. While “multiple leading industry experts” didn’t find issues with the track, Churchill Downs invested in new surface maintenance equipment and will double the frequency of track testing.
Additional resources will be added to CDI’s highly qualified veterinary team to provide additional monitoring and specialized care for horses and assist in pre-race inspections and entry screening,” said the company in a statement.
The gaming company added it will work with HISA to leverage a data-driven approach to identifying at-risk horses before they race and that a new safety management committee is forthcoming.
“A new safety committee will be established consisting of horsemen designees, racetrack employees and veterinarians to candidly discuss concerns and observations to constantly provide real time feedback on areas of improvement,” added Churchill Downs.
Analysts Still Bullish on Churchill Downs
Churchill Downs stock recently tumbled following the release of tepid second-quarter results, but analysts remain constructive on the shares.
Following the second-quarter earnings before interest, taxes, depreciation and amortization (EBITDA) and revenue misses, Bank of America lowered its price target on the stock to $142 from $155 while maintaining a “buy” rating on the stock.
Macquarie’s Chad Beynon is more optimistic, noting that as risks emerge for some regional gaming firms, Churchill Downs’ robust project pipeline could act as a buffer to macroeconomic headwinds.
“We still forecast ’23E and ’24E EBITDA growth of 31% and 22%, respectively, which in our view is near-industry leading and could prove to be conservative given opening/ramping projects,” wrote the analyst in a report to clients. “When ramped, we expect earnings to recover to $8+ per share and we still believe CHDN can support a >20x P/E multiple given its historical trading, 7% annual dividend increases and iconic asset (Churchill Downs).”
He rates the stock “outperform” with a $155 price target.
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