Stifel analyst Jeffrey Stantial downgraded Monarch Casino to Hold from Buy with a price target of $70, down from $83. The company remains comparatively well positioned amid a negative outlook for regional gaming fundamentals given strong population and job growth in Reno and Denver feeder markets, modest incremental upside for Black Hawk post expansion, and a “pristine” balance sheet, the analyst tells investors in a research note. However, the firm senses competitor promotional activity in Reno initially disclosed at Q3 earnings remains elevated – a “mostly idiosyncratic headwind” for Monarch that seems unlikely to change barring meaningful improvement in underlying player behavior. This suggests more likely downside versus upside risk to estimates, says Stifel.
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