Thursday’s stock market plunge buried the gaming equipment sector.
Manufacturers and suppliers recorded double-digit stock price percentage declines as fears over the economic impact of coronavirus shook the investment community. All of the publicly traded gaming companies – casino operators, manufacturers, and gaming-centric real estate investment trusts – were in the red.
The Dow lost nearly 1,000 points while the Nasdaq fell more than 3%. Many gaming companies fell to or closed in on 52-week price lows.
In a note to investors Thursday evening, Macquarie Securities gaming analyst Chad Beynon said many gaming companies “have seen disproportionate declines relative to their exposure.” He said the consumer sector “has been especially hard hit.” Governments and companies have implemented restrictions on travel and public gatherings
“Already, we’ve seen companies cancel investor days and pull guidance, underscoring the complexity of forecasting in today’s environment,” Beynon said.
On the gaming equipment side, a day after an upbeat fourth-quarter earnings report, AGS recorded the largest percentage decline in the sector – a dip 18.7% – closing the day at $6.65 on the New York Stock Exchange, down $1.53.
Before the markets opened, analysts were touting AGS to the investment community.
“We see early signs of the company regaining some of its lost product mojo and righting the ship in its Oklahoma installed base,” said Stifel Financial gaming analyst Brad Boyer.
AGS wasn’t alone. Everi Holdings closed at $7.77 on the New York Stock Exchange, down $1.62 or 17.25%. IGT was down $1.03 or 10.72% to close at $8.58 on the New York Stock Exchange while Scientific Games was down $1.78 or 10.18% to close at $15.70 on the Nasdaq.
SciPlay, Scientific Games’ social gaming subsidiary, saw a decline of 33 cents or 3.48% to close at $9.15 on the Nasdaq.
On Wednesday, after AGS reported fourth-quarter results, Sun Trust Bank gaming analyst Barry Jonas said the company, along with other gaming equipment providers, had yet to see “any discernible impact” in either operator slot purchasing behavior, or a decline in revenues from slot machines in which the companies share in profits with casino operators.
The three major casino operators with holdings in Macau that took stock price hits when the coronavirus outbreak forced two weeks of casino closures, continued to see shares hammered.
MGM Resorts closed at $20.60 on the New York Stock Exchange, down $2.70 or 11.59%. MGM’s high point in the last 52 weeks was $34.64. Las Vegas Sands closed at $54.94 on the New York Stock Exchange, down $2.31 or 4.03%. Las Vegas Sands had a 52-week high of $74.29.
Wynn Resorts fell under $100 a share is nearly $60 below its high point in the last 52 weeks. Shares closed at $95.58, down $10.08 or 9.54% on the Nasdaq.
Regional casino operators also saw hefty stock price declines.
Eldorado Resorts shares fell 15.52%, or $6.38, to close at $34.74 on the Nasdaq, the Reno-based company’s lowest price point in the last 52 weeks. Meanwhile, Caesars Entertainment was down 5.82%, or 69 cents on the Nasdaq, to close at $11.25.
Last week, Eldorado CEO Tom Reeg told analysts the stock market declines would not slow the $17.3 billion merger between the two casino operators, which is expected to close in the first half of the year.
Boyd Gaming Corp. closed at $22.45 on the New York Stock Exchange, down $2.28, or 9.22%. Penn National Gaming fell $3.20 or 12.28%, to close at $22.85 on the Nasdaq. Twin River Worldwide closed at $22.89 on the Nasdaq, down $2.16 or 8.62%; Churchill Downs closed at $122.51 on the Nasdaq, down $7.70 or 5.91%; Monarch Casinos closed at $39.13 on the Nasdaq, down $4.94 or 11.21%; and Full House Resorts closed at $2.38, down 36 cents or 13.14%.
Las Vegas centric casino operator Red Rock Resorts closed at $16.53 on the Nasdaq, down $2.66 or 13.86%; and Strat operator Golden Entertainment closed at $12.30 on the Nasdaq, down $2.30 or 14.17%.
#exclusive – Rough day: Share prices for gaming equipment providers hammered as markets crater. –@howardstutz, CDC Gaming Reports. https://t.co/Gt6AYfw7ED #CDCgaming
— CDC Gaming Reports (@CDCNewswire) March 6, 2020
Beynon cited Everi (down 42% year to date), Golden Entertainment (down 36%), AGS (-45%), IGT (down 43%), and Red Rock (down 31%), “as companies that have seen disproportionate declines relative to their exposure.”
Also on Thursday, Nevada saw its first patient who tested presumptively positive for COVID-19, according to the Southern Nevada Health District. First reported by the Nevada Independent, the Clark County man, who is in his 50s and has an underlying health condition, reportedly traveled recently to Washington State, where the virus has been widely spreading, and Texas.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
