Churchill Downs (CHDN): Valuation in Focus Following Earnings, Dividend Hike, Expansion, and New Legal Challenge

Churchill Downs (CHDN) made headlines after revealing a series of major developments this week. These included new earnings results, board-approved dividend hikes, ongoing buybacks, and a planned racetrack expansion. The company also faces new legal scrutiny, adding to recent investor focus.

See our latest analysis for Churchill Downs.

While Churchill Downs has unveiled upbeat initiatives such as a racetrack expansion, higher dividends, and continued buybacks, concerns around slowing profit growth and fresh legal scrutiny have weighed on sentiment. The share price is currently $99.2, with a sharp 1-year total shareholder return of -28.2%, reflecting shifting investor confidence even as fundamentals see some improvements and projects get underway. Long-term momentum has faded, but the company’s strategic moves suggest it is aiming to reverse the recent slump.

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With the share price still well below analyst targets and fundamentals showing some improvement, investors are left asking whether this is a chance to buy an undervalued stock or if future growth is already priced in.

Most Popular Narrative: 27.8% Undervalued

Churchill Downs last closed at $99.20, significantly below the most widely followed narrative’s fair value estimate of $137.45. This sets the stage for a debate about hidden upside versus recent setbacks and highlights the catalysts that bullish analysts are watching closely.

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.

Curious what ambitious bets this narrative is making about the company’s future? There is one big financial lever at the heart of this valuation. Get the details that move the needle as bullish analysts see them. It might surprise you what is driving the upside prediction.

Result: Fair Value of $137.45 (UNDERVALUED)

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

However, sustained high capital spending and shifting consumer interests could challenge Churchill Downs’ growth story if their new investments fail to deliver.

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

Build Your Own Churchill Downs Narrative

If you want to dig into the numbers for yourself or come to your own conclusions, you can build a fresh perspective in just a few minutes. Do it your way

A great starting point for your Churchill Downs research is our analysis highlighting 4 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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