VICI Properties Inc. (VICI), a real estate investment trust (REIT) with a market cap of $35.4 billion, specializes in owning and managing high-profile gaming, hospitality, and entertainment venues. The New York-based company’s extensive portfolio includes landmark properties such as Caesars Palace and the Venetian Resort, with a focus on long-term, triple-net lease agreements.
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and VICI properties perfectly fit that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the real estate sector.
VICI's financial performance reflects effective strategic operations and asset management, supported by diversified revenue streams from sales-type leases, lease financing receivables, and golf revenues.
The company's commitment to strategic investments, such as the $700 million enhancement of the Venetian Resort, aims to elevate the property value and generate incremental rent, positioning VICI for long-term growth while enhancing the guest experience.
VICI achieved its 52-week high of $34.29 in the last trading session. VICI has soared 20.3% over the last three months, outperforming the Real Estate Select Sector SPDR Fund’s (XLRE) 17.7% return during the same period.
However, in the long term, VICI’s prospects look less appealing, as it is up 6.8% on a YTD basis, and the shares have gained 8.5% over the past 52 weeks. In comparison, the XLRE has surged 13.2% in 2024 and 23.2% over the past year.
Despite the long-term weak price action, VICI has been trading above its 50-day and 200-day moving averages since late July, indicating a bullish trend.
VICI Properties' underperformance is attributed to investor apprehensions regarding its expansion into non-gaming sectors and potential refinancing challenges stemming from rising interest rates.
Additionally, the stock dipped marginally on Jul. 31 after its Q2 earnings release, driven by concerns about increased capital commitments and the impact of rising interest rates.
VICI Properties faces competition from top diversified REITs, including American Assets Trust, Inc. (AAT). VICI has lagged behind AAT, which has gained 19.3% in 2024 and 30.6% over the past year.
Despite the underwhelming price action, analysts hold a positive outlook for VICI. The stock has a consensus rating of "Strong Buy" from 21 analysts in coverage. The mean price target of $35.39 reflects a 4% premium over current price levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
