Macquarie cuts Bally’s stock price target on financing concerns

Macquarie has lowered its price target for Bally's stock to $11 from $13, citing financing concerns. The firm also reduced its 2026-2028 EBITDAR estimates for the company to $748 million, $841 million, and $943 million, respectively, from the previous estimates of $796 million, $932 million, and $1,032 million. This adjustment comes after recent quarterly results and trends.

Bally's stock has experienced a nearly 30% decline over the past week and a 41% drop year-to-date, trading at $9.82. Analysts consider the stock overvalued relative to its Fair Value. Despite a 20% year-over-year revenue increase in Q2, Bally's EBITDAR of $188 million missed estimates by 3%, and the B2C segment underperformed.

The company's substantial debt burden of $6.9 billion and analysts' expectations of no profitability this year further contribute to the cautious outlook. Bally's operates in a competitive market, with revenue growth in the Casinos & Resorts segment partially offset by competition in Atlantic City and East St. Louis. The company has secured a pre-construction loan and a letter of intent for a potential equity investment in its NYC project.

Recent developments include an agreement to acquire evoke plc and a going-concern risk disclosure due to tax-related challenges in the UK affecting the Intralot B2C segment. Bally's management anticipates regaining liquidity and leverage compliance by the end of the waiver period.

Other analysts, such as Truist Securities and Stifel, have also lowered their price targets and maintained a Hold rating, citing liquidity concerns and the company's challenges despite positive performance in its Casinos & Resorts segment. Moody's recently downgraded Bally's Corporate Family Rating to B3 from B2, attributing the downgrade to increased debt levels related to development plans and sale-leasebacks.