Bally’s Stock Jumps on Bullish Guidance, CEO Change

Posted on: February 13, 2023, 10:25h. 

Last updated on: February 13, 2023, 03:53h.

Todd Shriber @etfgodfather Read More

Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Bally’s (NYSE: BALY) stock rallied early Monday after the company unveiled bullish, preliminary fourth quarter and 2023 revenue guidance while announcing a key leadership change.

The regional casino operator forecast fourth-quarter revenue of $576 million, ahead of the $568.89 million analysts expected. Bally’s also projected 2023 sales of $2.5 billion to $2.6 billion, topping the consensus estimate of $2.46 billion. Full-year earnings before interest, taxes, depreciation, amortization, restructuring or rent costs (EBITDAR) are projected to be $660 million to $700 million.

Our core businesses are generating fantastic cash flows. UK revenue grew 12% organically in the fourth quarter as regulations continue to play through, while in December, Asia saw positive year-over-year organic growth, proving that our initiatives to maintain a competitive advantage in that market are effective,” said incoming CEO Robeson Reeves in a statement.

Reeves is replacing Lee Fenton, who is also resigning from the company’s board of directors. Reeves, who, like Fenton, joined Bally’s by way of the casino operator’s $2.7 billion acquisition of Gamesys in 2021, will assume the firm’s helm at the end of the first quarter.

Bally’s Looking to Shore Up North America Interactive Unit

Reeves is currently president of Bally’s interactive division — a unit that’s struggled in North America. The incoming CEO acknowledges as much, calling 2022 results from that division in that region “unacceptable.”

Last month, the gaming company said it would reduce headcount by up to 15% at the North American iGaming unit in a bid for profitability. Those layoffs could result in charges of up to $15 million.

“As part of the restructuring, we are evaluating multiple options, including leasing technology structures that integrate quickly and effectively with our world-class iCasino and Marketing tech stacks. We also expect our restructuring efforts to drive benefits in our International Interactive segment,” added Reeves.

The incoming CEO noted Bally’s is gaining online casino market share in New Jersey and Ontario, Canada.

Land-Based Casinos Could Boost Bally’s Stock

New amenities at one of its Rhode Island venues and the debut of a temporary casino in Chicago in the back half of this year could be catalysts for Bally’s stock. The temporary space in Chicago is being used ahead of the debut of the operator’s $1.7 billion integrated project in the third-largest US city.

Incoming Bally’s President George Papanier pointed out that while the company’s namesake venue on the Atlantic City Boardwalk lost money in the fourth quarter, the property is expected to be profitable this year.

“Significant capital expenditures toward property improvements will decrease in 2023 as we focus on generating cash flows to invest in long-term growth opportunities for the entire Bally’s portfolio. Finally, business momentum continues strong into 2023, with no slowdown in the consumer as we continue to closely watch market macro dynamics,” he said in the statement.

On Sunday, it was reported that the company may be in talks with the Trump Organization regarding the development of excess land around the Trump Golf Links at Ferry Point in the Bronx, N.Y,, as the site of a casino hotel. The company didn’t mention that effort in the statement discussing the financial guidance and executive changes.