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Jefferies kept a bullish view on VICI Properties (NYSE:VICI) ahead of the casino REIT’s Q2 earnings report.
Analyst David Katz and his team updated their model to fully reflect new estimates of the variable rent escalation at Caesars Entertainment’s (CZR) Las Vegas and regional leases. The firm also fine-tuned the incremental rent incomes at The Venetian from the equity funding and addressed the debt maturities in 2025 with the assumption of refinancing headwinds. Jefferies’ estimate for FY25 revenue was bumped up to $3.98 billion, and FY25 revenue of $3.98 billion is now seen. The price target on VICI was kept at $43
“We are valuing the company on the same blended multiples on 2024/2025 of 18x EV/EBITDA, 19x P/AFFO, and 16x P/FCF, which are peer-level multiples vs. NNN REITs with longer track records, absent the growth and future outlook of VICI. As the company diversifies its tenant base and pursues accretive deals, we expect the gap to continue compressing over time.”
Looking toward the Q2 earnings report, Katz said investors should expect a continuing discussion on the company’s recent transactions, including the Bowlero transaction and the Kansas City sports center. Due to the shifting interest rate outlook, VICI (VICI) may also provide updates on its call option on the Caesars Indiana property. Katz is also looking for discussions on acquisition strategies and pipelines in gaming, non-gaming, and loan origination opportunities.
Shares of VICI Properties (VICI) were up 0.60% in premarket trading on Monday to $28.26.