Posted on: January 3, 2023, 10:55h.
Final up to date on: January 3, 2023, 10:55h.
VICI Properties (NYSE:VICI), the most important on line casino landlord, earned some sell-side reward to kick-off 2023.
Caesars Palace on the Las Vegas Strip. Proprietor VICI Properties earned reward from Jefferies. (Picture: Las Vegas)
In a observe to shoppers right this moment, Jefferies analyst Jonathan Peterson anointed the true property funding belief (REIT) a high choose for 2023 whereas inserting a $43 value goal on the shares. That suggests upside of greater than 30% from the inventory’s last closing value of 2022.
We count on the expansion developments to proceed its development path as the price of conventional debt is on par with triple-net lease financing,” wrote Peterson. “Current ranges of 15.9x 2023E earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA) and 4.77% yield are enticing, given the additional built-in development from lease escalators based mostly on tenant operations and pending acquisitions not but totally mirrored in estimates.”
VICI, which owns the property belongings of Caesars Palace on the Las Vegas Strip, is coming off a banner displaying in 2022. The inventory gained 7.61% final yr whereas simply outpacing the S&P 500 and broader actual property indexes.
VICI a Progress Title in Defensive Sector
REITs are often seen as defensive or worth equities and whereas VICI options a few of these traits, its development trajectory is difficult to disregard.
By means of a collection of transactions over the previous two years, the New York-based firm grew to become the most important experiential REIT within the US in addition to the largest proprietor of property on the Las Vegas Strip. Beforehand, a lot of VICI’s acquisitions have been funded through capital raises — debt or share gross sales — however as Jefferies’ Peterson factors out, the corporate is now paying for offers with money readily available. That’s a major plus as a result of it means decrease financing prices in opposition to the backdrop of excessive rates of interest.
Talking of transactions, VICI was notably busy on that entrance final month, saying the acquisition of the property belongings of the Fitz On line casino & Lodge in Tunica, Miss. and the WaterView On line casino & Lodge in Vicksburg, Miss.
VICI’s different December offers included information that it’s offering financing for the Fountainbleu on the Strip, a brand new triple-net lease settlement with Laborious Rock Worldwide pertaining to the Mirage Las Vegas, the acquisition of the 49.9% of the Mandalay Bay and MGM Grand on the Strip that it beforehand didn’t personal a financing settlement with Century Casinos pertaining to 2 gaming venues in Missouri.
What 2023 May Look Like for VICI
VICI presently owns the property belongings of 45 casinos throughout the US in addition to 4 high-end golf programs. Whereas the REIT is most ceaselessly related to the gaming trade, it has supplied financing to different tourist-driven properties.
“VICI Properties intends to develop its nationally numerous portfolio of actual property by partnering with main experiential operators and capitalizing on strategic development alternatives by means of extremely complementary single-asset and portfolio acquisitions,” in keeping with the corporate.
VICI hasn’t revealed precisely what its 2023 plans, nevertheless it may very well be a participant for extra gaming actual property as operators look to monetize these belongings. Moreover, an activist investor is pushing amusement park operator Six Flags to promote its actual property and highlighted VICI as a possible suitor for these land holdings.
