Century Casinos (NASDAQ: CNTY) could still move to its sell its two-thirds stake in Casinos Poland and might eventually consider repurchasing its own shares.
Century Casinos’ Rocky Gap Casino in Maryland. The company is still looking to sell its Poland unit and could consider share repurchases. (Image: Oregon Live)
That’s the take of Stifel analyst Jeffrey Stantial who recently spoke with Century co-CEO Peter Hoetzinger. Stantial observed that while there’s favorable risk/reward baked into the long-slumping gaming stock, the shares “trade at a hyper-cautious” 23% free cash flow yield relative to 2025 estimates.
That implies a relief rally could be in store and, if it arrives, it would be none too soon as the stock is down 18.6% over the past month and 46.1% year to date. The long-awaited sale of the Casinos Poland stake could be a catalyst for the stock.
In Poland, management sees segment adjusted earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) drifting back to $11 million-plus once the final temporarily closed property re-opens in August,” wrote Stantial. “Management remains committed to a strategic divestiture of Casinos Poland, with discussions re-accelerating as CNTY has concluded the recent license renewal cycle.”
The sale was delayed by Russia’s invasion of Ukraine, which sent scores of Ukrainian refugees to Poland. Many of those Ukrainian nationals have been devoted customers of Casinos Poland venues.
Century Casinos Could Be Prime Buyback Candidate
Stantial notes that Century has $137 million in cash on its balance sheet, or more than $55 million in excess of its current market capitalization of $81.62 million.
That implies the regional casino operator’s stock is getting essentially no credit for the strong balance sheet, which could be a clear sign of a value opportunity. It’s possible Century management will eventually deploy share buybacks to signal to investors they see value in the stock.
“At CNTY’s current valuation, management sees repurchases as the most attractive return on capital – though acknowledging the high cost of debt should CNTY re-rate higher before late-24,” observed Stantial.
Stantial has a “buy” rating and $4 price target on the stock. He added that Century is likely to keep some dry powder over the near term due to expansion costs and deployment of excess capital is unlikely prior to the company finalizing enhancements at its Caruthersville, Mo. casino hotel.
Speaking of Missouri …
In the US, Century’s pair of Missouri properties, one in Cape Girardeau and the other in Caruthersville, are integral to the broader investment thesis along with the Nugget in Sparks, Nev., and Rocky Gap in Maryland.
It appears the operator’s investments in Missouri are poised to pay long-term dividends, potentially providing an important catalyst for the stock.
“Management noted Cape Girardeau has proven surprisingly resilient to the 8/25 Walker’s Bluff opening, though potentially re-accelerating promo spend remains a key risk to monitor,” concluded Stantial. “The $52M Caruthersville boat-to-land project remains on schedule & budget, with management reiterating $3-4M incremental adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) targets (~15% cash-on-cash return). Comparable boat-to-land projects have averaged ~30% cash-on-cash returns.”
The post Century Casinos Still Mulling Poland Sale, Could Consider Share Buybacks, Says Analyst appeared first on Casino.org.
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