Gaming & Leisure Properties ( NASDAQ: GLPI ) appears to be a safe bet for investors, according to RBC Capital Markets analyst Brad Heffern.
He explained that the company’s current valuation suggests a discount to its closest peers, with greater room to grow than many peers. Additionally, the company’s “robust lease protections” should provide downside protection, in his view.
“We see GLPI's regional gaming cash flows as being highly durable, while above-average acquisition accretion has led to a total return profile towards the top of the net lease group over time,” Heffern told clients. “We see a large universe of remaining acquisition opportunities and think that the current valuation looks compelling versus both the broader group and [VICI Properties] ( VICI ).”
He noted that the discount to VICI’s multiple is most glaring.
“While GLPI's cap rates are higher than both the net lease group and VICI, we see NAV as basically irrelevant in a space with such little competition/market depth,” Heffern wrote. “We think GLPI should trade more off DCF and cash flow quality, and see upside to the current
valuation when taking that view into account.”
As such, Heffern assigned a $54 price target to the stock alongside a “Buy” rating. The stock closed at a price of $48.69 on Friday.
The positive assessment from RBC adds to a generally bullish sentiment on the stock among analysts .
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Gaming & Leisure Properties initiated at ‘Buy’ rating by RBC