The 11th annual Gaming & Lodging Convention from Bank of America hosted ten firms. A have a look at the highlights from DraftKings Inc (NASDAQ: DKNG), Penn Nationwide Gaming (NASDAQ: PENN), and Hilton Worldwide Holdings Inc (NYSE: HLT).
Bank of America analyst Sarah C. Kelley shared takeaways from the convention on three firms.
DraftKings: The resumption of the foremost sports activities has been a giant catalyst for DraftKings. Kelley notes DraftKings feedback had a “very strong opening weekend with the NFL season.”
DraftKings additionally famous how newer markets are sturdy and New Jersey is seeing enormous power.
“Management still thinks this fall will present unique customer acquisition opportunities in existing markets and recent launches such as Colorado and Illinois,” Kelley stated.
Different catalysts embody the co-exclusive link-out deal signed with ESPN and legalization in additional states.
Penn Nationwide: The important thing takeaway from the Penn Nationwide presentation was feedback on the delicate launch of the Barstool Sportsbook. “Penn has been impressed with the limited data they have seen so far,” Kelley stated. “This weekend will be important to watch and we expect a lot of focus around early app download data and customer reviews.”
Penn Nationwide is looking for to be a high three competitor by way of market share for the states it competes in for sports activities betting and iGaming.
“Barstool’s unorthodox marketing approach should allow for a meaningful CAC advantage compared to incumbents and potentially earlier profitability than for peers,” Kelley stated.
Penn’s land-based casinos proceed to see power, which Kelley notes reveals this isn’t “merely a product of unsustainable pent-up demand. Penn Nationwide believes it may possibly work on long-term margin enchancment with operational adjustments for its land-based on line casino enterprise.
Hilton: The convention featured displays from a number of lodging firms, however he one which stood out to Kelley was Hilton. “Our most positive takeaways were from Hilton which was more bullish than anticipated on margins as it rethinks its corporate G&A structure and simplifies brand standards for owners,” Kelley stated.
The learn on administration on the convention confirmed September and October in keeping with August ranges with a continued enchancment coming in November.
“Will likely take until 2022-2023 before a return to 2018/2019 levels of demand activity,” Kelley stated. “Hilton can obtain record-level margins and free cash movement this cycle due to a mix of compounding unit progress and a decrease/extra environment friendly value construction.”
Value reductions of 25% in G&A might grow to be everlasting and assist margins going ahead. Kelley believes Hilton will hit optimistic or break-even cash movement as early because the fourth quarter of fiscal 2020.
Photograph by Sixflashphoto by way of Wikimedia.
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