– Churchill Downs is the owner of the Kentucky Derby and various regional gaming assets.
– The company is run by an aligned management team that has created a tremendous amount of shareholder value.
– Since 2014 total return CAGR of 28.9% vs. S&P 500’s 11.3%.
– Management has proven adept at acquiring and divesting assets opportunistically, expending capital on new-build projects at oftentimes very short payback periods, and buying back shares.
– Normalized earnings are well north of $20/share as we get past the current cap cycle and existing properties mature.
– Management is expected to continue creating value through additional acquisitions and divestments as they’ve done in the past.
– Expected to earn over $20/share in 2025 from the assets and project pipeline they have today.
– At 20x multiple that implies a $400/share price target.
Exp. gain: 60%
Full write-up (free guest account required):
Churchill Downs (CHDN), mcap=$9538m