JMP analyst names 5 gaming stocks to buy on the downside

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It’s been a tough year so far for casino and online gaming stocks, but one firm has identified a handful of gaming stocks investors should consider buying on the downside.

The analyst: Jordan Bender, an analyst at JMP Securities, initiated coverage of the following five stocks:

  • Rush Street Interactive Inc IRSmarket outperformance rating, $12 price target.
  • Penn National Gaming, Inc. PENmarket outperformance rating, $52 price target.
  • MGM Resorts International MGMmarket outperformance rating, $55 price target.
  • Golden Entertainment Inc. GDENmarket outperformance rating, $63 price target.
  • ProjectKings Inc DKNGmarket outperformance rating, $25 price target.

Related Link: Macau Gaming Law Final Version: What Investors Need to Know

The thesis: Bender broke his bullish position on iGaming, online sports betting and the Nevada casino market.

US iGaming legislation could be a major catalyst for Rush Street, Bender said.

“As NA’s online sports betting (OSB) and iGaming markets grow, we expect gross gaming revenue (GGR) of approximately $8.1 billion in 2021 to reach $39 billion in 2021. ‘by 2030E (23% CAGR), $3.9B in Canada (30% CAGR), and >$800M in Colombia/Mexico,” he wrote.

Related Link: MGM Resorts Analysts React to Q1 Earnings Pace, LeoVegas Acquisition and Macau Weakness

Bender said the Penn’s Barstool brand sets it apart from its competitors.

“Barstool complements PENN’s casino database to create customizable content and product for a younger, more football-focused audience, a demographic similar to the OSB player,” he said.

Bender values ​​BetMGM at $15 billion and says MGM is the market leader in iGaming.

“We believe a combination of BetMGM’s omnichannel, 37 million database members, along with Entain’s industry-leading technology positions it ahead of the competition,” he wrote.

Golden Entertainment primarily focuses on Nevada, but Bender said he is diverse within the state.

“Nevada is one of the healthiest U.S. gambling markets, and despite volatility in the broader macro environment, our recent visit shows no downturn for the casino’s core customer or portfolio size,” a- he declared.

Finally, Bender said that DraftKings is a market leader in the fast-growing, vertically integrated daily fantasy sports and online sports betting market.

“While we are in [the] early innings of the online gaming industry, we believe DKNG can retain its market share in NA online gaming, through cross-selling and its superior technology capabilities in SBTech, leading to profitable growth,” he said. -he declares.

Benzinga’s opinion: There are several different dynamics in the gambling space these days that make stock picking essential. Ongoing shutdowns in China have made Macau an albatross for casino stocks, while Las Vegas has recovered well from the pandemic. Additionally, online sports betting and iGaming have been huge sources of growth, but some of the early market leaders are struggling with heavy losses associated with aggressive marketing and advertising spending.

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