Monarch On line casino & Resort soars with capital allocation potential within the combine

Monarch On line casino & Resort (NASDAQ:MCRI) was the largest gainer within the on line casino sector on Thursday afternoon with a 14.67% leap to $70.58.

Shares of MCRI rose to their highest degree for the reason that earlier a part of March on the heels of a robust earnings report.

The on line casino inventory additionally caught the eye of Stifel, which lifted its ranking to Purchase from Maintain.

“We argue MCRI is relatively effectively positioned given financial tailwinds in each working markets [Black Hawk and Reno], additional VIP upside in Black Hawk, the next earnings buyer base, and a pristine steadiness sheet which ought to enable for opportunistic deployment of capital in a possible downturn (acquisitions; continued property reinvestment),” wrote analyst Jeffrey Stantial.

The beginning of MCRI’s capital return program can be anticipated to be a near-term catalyst.

Of excessive curiosity to buyers, Stantiak and crew view MCRI as a beautiful takeout candidate for a bigger participant.

Right here is MCRI’s assertion on capital allocation from earlier within the week: “Utilizing money circulate from operations, we’ve now paid down a considerable portion of our debt. Given our continued money circulate progress and low leverage, we’re evaluating a full vary of capital allocation choices, together with potential share repurchases below our present 2.9 million share repurchase authorization and potential dividend.”

Stifel assigned a value goal of $77 to MCRI.