Stifel: Red Rock Selloff ‘Overdone’, Las Vegas Locals Market Still Healthy

• Red Rock stock is saddled with a modest year-to-date loss
• It surged over the past week, indicating investors may be revisiting the name
• Analyst says investors should focus on 2027

Even with the benefit of an 11.26% rally over the past week, shares of Red Rock Resorts (NASDAQ: RRR) are off on a year-to-date basis and reside 12.61% below the 52-week high, but one analyst says that retrenchment is overdone.

Red Rock’s 2026 retreat of 2.63% comes as the S&P MidCap 400 Index is up 13%, but Stifel analyst Steven Wieczynski says trends remain strong in the Las Vegas locals (LVL) market — the operator’s core constituency — adding that investors should turn their attention to 2027 as it relates to this casino stock.

Bottom line is that we think current demand/spend trends across the LVL market remain healthy/strong, and we remain encouraged by long-term secular tailwinds to Southern Nevada’s economy/housing market,” writes the analyst. “We believe as investors turn their focus to 2027 and start to understand the majority of RRR’s construction disruption will then be in the rear-view mirror, shares will look grossly undervalued.”

This year, Red Rock stock is lagging the broader mid-cap universe due to construction disruptions at several of the operator’s casinos, including the Durango Casino & Resort in Southwest Las Vegas.

Red Rock Stock Pullback a ‘Buying Opportunity

In addition to the latest expansion at Durango, Red Rock is also sprucing up Green Valley Ranch (GVR) and Sunset Station and while the operator has acknowledged some minor pains caused by construction and maintenance at those properties, those headwinds will abate by the end of this year.

The analyst, who rates the stock “buy”, said Red Rock is still experiencing solid demand trends even against the backdrop of high gas prices.

“From here we see a compelling long-term case to own RRR based on (1) continued strength emerging out of the LVL market driven by strong/healthy demographics, (2) potential LVL market share gains due to superior assets, (3) untapped/undeveloped land bank which gives the company optionality, and (4) best-in-class growth profile across our gaming coverage,” observes Wieczynski. “Our revised $70 price target shows approximately 20% upside.”

Speaking of Red Rock’s Real Estate…

Red Rock owns what it describes as “six highly desirable gaming-entitled development sites consisting of approximately 441 acres” across the Las Vegas Valley as well as all of the property on which its established gaming venues reside, meaning the operator sits on a treasure chest of real estate.

Wieczynski estimates Red Rock’s Sin City untapped land is worth $2 million per acre, implying an aggregate value of $882 million.

“A key distinction here is that RRR has the option to restrict the gaming entitlements on its owned real estate in a sale, which means it could divest land without creating new casino competition in the region,” adds the analyst. “This flexibility not only serves as a differentiated organic growth pipeline for future greenfield development, but also a potential source of cash flow to fund investment or reduce leverage.”