OTCPK:GCGMF - Post by User
Post by
maypeterson Nov 07, 2018 8:14am
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Post# 28935568
RBC increases PT to $64 and upside scenario $76
RBC increases PT to $64 and upside scenario $76 Revising price target +$1 to $64; Reiterate Outperform rating
Our $64 price target is based on ~9.5x our 2019E/2020E “net” Adjusted EBITDA of $435 million
($429 million previously). We have revised our price target due to the roll-forward of our
blended 2019E/2020E Adjusted EBITDA forecast by one quarter.
Our valuation multiple reflects the potential upside associated with the expansion and redevelopment opportunities at the GTA and West GTA Gaming Bundles. Our valuation multiple is at a premium to Great Canadian’s U.S. regional peers due to Great Canadian’s better growth prospects and stronger balance sheet. Our price target supports an Outperform rating.
Upside scenario
In our upside scenario, we assume that GC delivers stronger than-expected results over our forecast horizon, driven by the GTA and West GTA Gaming Bundles, and lower-thananticipated
impact on GC’s facilities from the relocation of the competing Edgewater Casino within downtown Vancouver.
Applying an ~10.5x multiple to a higher 2019E/2020E Adjusted EBITDA of $475MM drives our upside value of $76.