Twin River Viewed as Solid Long-Term Bet, Analyst Sees Spectacular Upside Potential

Twin River Worldwide Holdings (NYSE:TRWH) is in the midst of a redemption story that s carrying the stock to a more than three-fold gain off its March lows. but one analyst sees more upside on the way for the Rhode Island-based gaming company.

In a note to clients today, Union Gaming analyst John DeCree reiterated a “buy” rating on the Tiverton Casino operator, while lifting his price forecast on the stock to $30, implying upside of 25 percent from current levels.

DeCree cites several bullish catalysts for TRWH, including selective acquisition opportunities, enhancements at some marquee properties, a new slot accord in the Ocean State with International Game Technology (IGT), and iGaming and sports wagering.

Earlier this year, TRWH and IGT agreed to end a multi-month tiff, creating a new company that will dominate the gaming machine market at Rhode Island s two casinos, both of which are operated by Twin River. That join venture goes .

When TWRH went public last year, its property roster consisted of just five venues – four casinos in Rhode Island, Delaware, and Mississippi, and a racetrack in Colorado. Today, that number is up to eight and poised to grow as previously announced transactions are finalized.

This year, TRWH is adding the Isle of Capri Casino Kansas City, Mo., and the Lady Luck Vicksburg, Miss. – properties TRWH, bought from Eldorado Resorts (NASDAQ:ERI) in 2019 for $230 million. In January, the operator added in a $51 million deal with Affinity Gaming. The Centennial State deals bolster TRWH s footprint in one of the fastest-growing sports wagering markets in the country.

In April, TRWH revealed a transaction that some industry , announcing it s buying the Eldorado Shreveport Resort and Casino in Louisiana, the MontBleu Resort Casino in Lake Tahoe, Nevada from Eldorado, and Bally s Atlantic City from Caesars Entertainment (NASDAQ:CZR) for just $180 million combined.

DeCree, the Union Gaming analyst, said Twin River will remain acquisitive as it looks to diversify its geographic footprint and reduce its revenue dependence on its home state. As the aforementioned three-property deal with ERI confirms, gaming venue prices are depressed in the wake of the COVID-19 pandemic, meaning it could be a buyer s market.

The analyst says that, over the long-term, TRWH has a runway to boost its stock price to $45, nearly double the $24 handle at which it trades today.

We estimate TRWH could be on a path to $275m+ of EBITDA and roughly 4.0x-4.5x net debt to earnings before interest, taxes, depreciation and amortization (EBITDA),” said DeCree. “At this level of EBITDA, even a conservative real estate monetization event would peg the company at a valuation of nearly $45 per share.”

He didn t specify which properties TRWH could seek to wring value out of. But there are plenty of for operators looking to sell real estate. Twin River owns the property assets of nearly all of its venues.