VICI Properties Inc. (VICI), a real estate investment trust (REIT) with a market cap of $32.8 billion, specializes in owning and managing high-profile gaming, hospitality, and entertainment venues. The New York-based company’s extensive portfolio includes landmark properties such as Caesars Palace and the Venetian Resort, with a focus on long-term, triple-net lease agreements.
Shares of the REIT have underperformed the broader market over the past 52 weeks. VICI has risen marginally during this period, contrasting with the S&P 500 Index's ($SPX) robust rally of 15.1%. In 2024, VICI shares dipped 1.3%, lagging behind SPX's 9% gain on a YTD basis.
Zooming in further, VICI's performance trails behind the US Real Estate iShares ETF (IYR), which has recorded gains of 8.3% over the past 52 weeks and a 2.8% increase on a YTD basis.
VICI Properties' underperformance stems from investor concerns about its expansion into non-gaming sectors and potential refinancing challenges due to rising interest rates. Moreover, the stock dipped marginally on Jul. 31 after its Q2 earnings release due to concerns over its increased capital commitments and interest rate impacts but recovered slightly the next day as investors recognized the strong earnings and growth potential from new investments, particularly in The Venetian Resort and Great Wolf Resorts.
For the current fiscal year, ending in December, analysts expect VICI's AFFO to grow 5.1% year over year to $2.26 per share. The company's earnings surprise history is promising. It topped or met the consensus estimates in all of the last four quarters.
The consensus rating among the 21 analysts covering the stock is a “Strong Buy.” That’s based on 17 “Strong Buy” ratings, one “Moderate Buy,” and three “Holds.”
This configuration has remained steady over the past three months.
On Aug. 1, Stifel Nicolaus analyst Simon Yarmak maintained a “Buy” rating on VICI Properties, setting a price target of $33.75. This newly assigned price target suggests a 7.2% potential upside from current levels.
The mean price target of $35.23 represents a premium of 11.9% to VICI's current levels. The Street-high price target of $43 implies a modest potential upside of 36.6% from the current price levels.
On the date of publication, Sohini Mondal 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.
