Churchill Downs (CHDN): Assessing Valuation After Latest Share Price Pullback

Churchill Downs (CHDN) has seen its stock price slip for another month, with shares easing about 6% in that time. For investors, the recent pullback will likely prompt a closer look at what is driving sentiment.

See our latest analysis for Churchill Downs.

After a slow drift downward this month, Churchill Downs’ recent share price slip builds on a longer pattern of fading momentum. The 1-year total shareholder return is now off nearly 29%, and the 5-year total return is not enough to reverse that downtrend. That suggests investors are still weighing near-term uncertainty against broader growth potential, leading to the current wait-and-see sentiment.

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With shares trading far below analyst price targets, some may wonder if Churchill Downs presents an undervalued opportunity, or if the market is already accounting for its growth prospects. Could this be the right time to buy, or is caution warranted?

Most Popular Narrative: 30% Undervalued

With the most followed narrative placing Churchill Downs’ fair value well above its recent closing price, the gap between current market sentiment and future potential is becoming more pronounced. Here, the focus is on how business reinvestment and new partnerships might transform the company’s long-term earnings path.

Strategic reinvestment in premium Kentucky Derby experiences and selective venue upgrades—particularly expanding Derby Week with new hospitality offerings, international marketing, prime-time Oaks coverage, and enhanced digital content—should drive substantial step-function revenue growth, higher per-attendee pricing, and stronger sponsorship income in 2026 and subsequent years, supporting higher adjusted EBITDA and net margins.

Read the complete narrative.

Want to know what’s fueling this dramatic upside? The narrative’s conviction is powered by ambitious growth targets, improving profit margins, and a bold forecast for future share repurchases. Curious which forecasts lead the story and why this narrative bets on a rising valuation multiple? Peel back the surface to see how just a few key projections could justify that striking price target.

Result: Fair Value of $137.45 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent high costs from upgrades or a decline in horse racing popularity could sharply impact revenue and threaten this optimistic scenario.

Find out about the key risks to this Churchill Downs narrative.

Build Your Own Churchill Downs Narrative

If you see things differently or want to dig into the details yourself, it takes just a few minutes to craft and test your own perspective. Do it your way.

A great starting point for your Churchill Downs research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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