RRR: Expanded Project Pipeline Will Drive Future Upside Despite Ongoing Renovations

Analysts have trimmed their average price target on Red Rock Resorts by less than $1 to approximately $65, citing a fully valued share price in the near term. This comes despite robust Las Vegas locals fundamentals and a multiyear project pipeline that could add several hundred million dollars of incremental EBITDA.

Analyst Commentary

Street research on Red Rock Resorts reflects a constructive long term outlook tempered by valuation and execution concerns around the current development cycle.

Bullish Takeaways

• Bullish analysts highlight a compelling risk and reward setup following the recent pullback, arguing that the stock now better reflects construction related headwinds already embedded in 2026 estimates.
• Multiple price target increases into the mid to high 60s underscore confidence that the multiyear project pipeline, including the Durango expansion and ongoing renovations, can drive several hundred million dollars of incremental EBITDA.
• Research notes point to sustained strength in the Las Vegas locals segment, with casino and food and beverage revenue holding up even during construction disruption, supporting the durability of the company’s competitive positioning.
• Positive commentary around consumer spend trends in key regional markets suggests a favorable backdrop for Red Rock’s broader portfolio and reinforces upside potential to near term earnings expectations.

Bearish Takeaways

• Bearish analysts describe the shares as fully valued at current levels, with some initiating coverage at neutral ratings and targets below the prevailing price, which limits upside in the near term.
• There is caution that the strong Las Vegas locals fundamentals may already be priced in, prompting some to wait for an irrational pullback before adding exposure.
• Ongoing construction and renovation activity introduces execution risk and the potential for further disruption, even if partially reflected in forward estimates.
• Concerns linger that macro or Strip related softness could ultimately bleed into locals performance and challenge the more optimistic growth and margin assumptions embedded in higher price targets.

What's in the News

• Red Rock Resorts was added to the S&P 1000, broadening its visibility and potential ownership among index and small cap managers (Key Developments).
• The company was simultaneously added to the S&P 600, the S&P 600 Consumer Discretionary sector index, and the S&P Composite 1500, further integrating the stock into major benchmark families (Key Developments).
• Red Rock increased its equity buyback authorization by $300 million to $900 million and extended the repurchase program through December 31, 2027, indicating continued confidence in long term value creation (Key Developments).
• From July 1 to September 30, 2025, the company repurchased 92,237 shares for $5.58 million, completing 8,074,820 shares, or 12.58 percent of shares, under its long running buyback program (Key Developments).
• Jefferies upgraded Red Rock Resorts to Buy from Hold with a $65 price target, citing a clear path to upside from the Durango expansion and broader project pipeline (Periodicals).

Valuation Changes

• Fair Value Estimate has edged down slightly from $65.77 to $65.07 per share, indicating a modest reduction in modeled upside.
• Discount Rate has risen marginally from 9.84 percent to 9.86 percent, reflecting a slightly higher implied risk profile in the valuation framework.
• Revenue Growth has remained at 3.43 percent, effectively unchanged but signaling a minor tempering of long term top line expectations.
• Net Profit Margin has remained at 12.13 percent, suggesting an essentially unchanged but marginally more optimistic profitability outlook.
• Future P/E has moved down modestly from 18.88x to 18.69x, implying a slightly lower valuation multiple applied to forward earnings.