Update shared on 25 Nov 2025
Fair value Decreased 1.66%Analysts have modestly reduced their price target for Churchill Downs, lowering it by $2 to reflect slower regional casino trends and economic headwinds that are impacting recent performance.
Analyst Commentary
Analyst review of Churchill Downs highlights both areas of optimism and ongoing concerns surrounding the company’s valuation and performance. The recent price target adjustments reflect evolving market conditions and business trends.
Bullish Takeaways
- Bullish analysts consider shares attractively valued at present levels and see upside potential compared to sector peers.
- Following a stronger than expected summer, Churchill Downs demonstrated resilience in core regions. This suggests strength in baseline operations.
- Despite short-term pressures, the company maintains a positive long-term outlook based on ongoing investments and market position.
- Compared to other gaming operators in recent sector reviews, Churchill Downs remains favorably rated within the group. This indicates analyst confidence in relative execution.
Bearish Takeaways
- Recent price target reductions are tied to a slower than expected ramp-up at the Dumphries property near Washington DC, which has weighed on overall performance.
- Regional economic uncertainty, including the impact of government shutdown risks and variable state policy enforcement on gaming operations, poses headwinds to growth.
- September saw a marked slowdown in regional casino trends following earlier summer strength. This raises questions about demand sustainability.
- Ongoing regulatory inconsistencies around illegal gaming machine enforcement introduce additional execution risk in key markets.
What's in the News
- A class-action lawsuit alleges that Churchill Downs and other horseracing entities have engaged in collusive, algorithmic betting schemes that disadvantage everyday bettors and transfer wagering profits to a small group of insiders (Key Developments).
- Churchill Downs' Board of Directors approved an annual cash dividend increase to $0.438 per share, up 7% year over year, payable in January 2026 (Key Developments).
- The company announced "Victory Run," a $280 to $300 million premium hospitality project at Churchill Downs Racetrack, which will add new seating and amenities by the 2028 Kentucky Derby, pending local and state approval (Key Developments).
- Ongoing share buybacks have been completed, with the company repurchasing over 3.29 million shares for $330.72 million since March 2025 (Key Developments).
- Cboe Global announced plans to enter the prediction market sector, a space that includes Churchill Downs among its publicly traded competitors (Periodicals).
Valuation Changes
- Fair Value Estimate has decreased modestly from $137.45 to $135.17.
- Discount Rate has edged down from 10.55% to 10.08%.
- Consensus Revenue Growth expectation has fallen significantly, from 4.23% to 3.01%.
- Net Profit Margin forecast has increased from 16.89% to 18.71%.
- Future P/E Ratio has declined from 20.59x to 18.03x.
Disclaimer
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