Published on: January 6, 2025, 02:00h.
Last updated on: January 6, 2025, 02:06h.
Golden Entertainment (NASDAQ: GDEN) shares may see a boost in 2025 if the company decides to sell off some or all of its real estate holdings.
Deutsche Bank analyst Carlo Santarelli believes that potential real estate transactions could drive Golden’s stock price to $40 if executed at current market prices. The stock is currently trading around $32, below Deutsche Bank’s target of $36. Santarelli noted that while gaming real estate investment trusts (REITs) are interested in acquiring Las Vegas assets, completing deals may be challenging at present.
“Should this change, we believe Golden would be open to a real estate sale in conjunction with something further and strategic in nature related to the remaining OpCo,” observed Santarelli. “In the absence of a real estate transaction, we believe something is likely to give in 2025, as the current structure of Golden is hard to rationalize, given the lack of growth in the portfolio, shrinking public float, and elevated corporate expense relative to the portfolio earnings before interest taxes, depreciation, and amortization (EBITDA).”
While it’s uncertain what action Golden may take in 2025, the company has shown willingness to enhance shareholder value through strategic moves such as selling its distributed gaming operations, share buybacks, and initiating a quarterly dividend.
“We believe the capital-return story, while it hasn’t proven fruitful for peers, could be unique here, given the smaller float and the strategic alternative perceptions of GDEN,” added Santarelli.
Golden Entertainment Real Estate Sale Rumor Gaining Traction
Santarelli was one of the first to mention the possibility of Golden selling real estate to unlock value for investors. He hinted at this last October.
On the company’s third-quarter earnings conference call the following month, executives suggested they could explore strategic moves to increase shareholder value. Whether this includes property sales remains to be seen, but gaming REITs would likely be interested in The Strat.
The Strat, located near the Las Vegas Strip, is the crown jewel of Golden’s real estate portfolio. A potential sale of this venue could fetch a significant portion of Golden’s $861.27 million market capitalization.
Golden currently owns the real estate of all eight of its casino hotels. Three are in Las Vegas, three in Pahrump, Nev., and two in Laughlin.
Speculation on Golden Real Estate
The off-Strip Strat would be particularly appealing to potential buyers, although some casino landlords prefer properties in markets outside of Las Vegas.
Golden has previously undertaken such deals and may consider selling the currently closed Colorado Belle in Laughlin, Nev. Speculation about the future of this venue has been ongoing, but the operator has not confirmed if the casino is up for sale.
Golden may provide further details on asset sales when it reports fourth-quarter results, although a date for this event has not yet been announced.