RRR: Las Vegas Locals Strength And Pipeline Execution Will Shape Future Upside Risk

Analysts have nudged their fair value estimate for Red Rock Resorts slightly higher to approximately $65.20 per share from about $65.07, citing a robust Las Vegas locals backdrop, a growing pipeline of development and expansion projects, and expectations for solid EBITDA growth despite ongoing construction disruption.

Analyst Commentary

Recent Street research continues to highlight a constructive backdrop for Red Rock Resorts, with most commentary focused on the durability of Las Vegas locals demand, the scale of the development pipeline, and how ongoing construction disruption is being reflected in forward estimates and valuation.

Bullish Takeaways

• Bullish analysts point to a visible project pipeline, including the Durango expansion and active renovations at key properties, as a driver of several hundred million dollars of potential incremental EBITDA, with a meaningful portion expected within the next three years.
• Multiple positive rating and target price changes emphasize that the Las Vegas locals market remains resilient, with recent results suggesting that concerns about spillover weakness from the Strip are overstated.
• Some valuation frameworks highlight a compelling risk and reward profile after recent share pullbacks, arguing that 2026 consensus already embeds a reasonable level of construction related headwinds from Durango.
• Solid performance in casino and food and beverage revenue, even amid notable construction disruption, is viewed as evidence that Red Rock’s local market positioning and product offering can support sustained growth during the build out phase.

Bearish Takeaways

• Bearish analysts view the shares as largely fully valued at current levels, suggesting that near term upside could be constrained unless execution on the development pipeline exceeds expectations.
• Some commentary stresses that while fundamentals are strong, they would not chase the stock here and prefer to wait for an “irrational” pullback to improve the entry point relative to their fair value estimates.
• There is caution that, despite the constructive outlook, ongoing construction disruption still introduces execution risk, and any delays or cost overruns at key projects could weigh on earnings momentum.

What's in the News

• Jefferies upgraded Red Rock Resorts to Buy from Hold with a $65 price target, citing a clear upside path from the Durango expansion, active renovations, and several hundred million dollars of potential incremental EBITDA, including about $200 million expected within three years (Jefferies research note).
• Stifel raised its price target on Red Rock Resorts to $63 from $60 while maintaining a Hold rating, arguing that fears of Las Vegas Strip weakness spilling into the locals market appear overblown but preferring to wait for a more attractive entry point (Stifel research note).
• Red Rock Resorts increased its equity buyback authorization by $300 million to a total of $900 million and extended the program through December 31, 2027, reinforcing management's capital return commitment (company buyback update).
• From July 1, 2025 to September 30, 2025, the company repurchased 92,237 shares for $5.58 million, completing 8,074,820 shares, or 12.58 percent of its stock, for $324.76 million under the long running buyback program announced in 2019 (company buyback tranche update).
• Red Rock Resorts declared a fourth quarter 2025 cash dividend of $0.26 per Class A common share, payable December 31, 2025 to shareholders of record as of December 15, 2025 (company dividend announcement).

Valuation Changes

• The fair value estimate has risen slightly to approximately $65.20 per share from about $65.07, reflecting a modestly more constructive long-term outlook.
• The discount rate has fallen slightly to roughly 9.78 percent from about 9.86 percent, indicating a marginal reduction in perceived risk or cost of capital.
• The revenue growth assumption has risen slightly to about 3.46 percent from roughly 3.43 percent, implying modestly stronger top-line expectations.
• The net profit margin assumption has edged down slightly to around 11.93 percent from about 12.13 percent, suggesting a small anticipated compression in profitability.
• The future P/E multiple has increased slightly to roughly 19.0 times from about 18.7 times, indicating a modestly higher valuation multiple applied to forward earnings.