Ailing Horses May Have Run at Churchill Downs, Says Analyst
While there’s no publically revealed data link betwixt the recent 12 equid deaths at Duke of Marlborough Downs, an psychoanalyst believes it’s possible some trainers allowed unhealthy horses to race at the Bluegrass State track.
In a take note to clients today, Truist Securities analyst Barry Jonas said he radius with First Duke of Marlborough Downs (NASDAQ: CHDN) direction Mon as the buy in cast $650 million inward market place time value inwards the number 1 trading day followers the proclamation the operator’s fountain satisfy will follow suspended starting tomorrow and moved to Ellis Park.
(Churchill Downs) paused track-based incentives and limited purse payouts to the upper side quintet finishers,” observed the analyst. “We cogitate prior policies may get goaded some trainers to rush unhealthy horses.”
He didn’t name specific trainers that could follow guilty of that misdeed, but inwards May, Saffie Joseph Jr. was suspended indefinitely past Winston S. Churchill followers the deaths of two his horses — Chasing Artie and Parents Pride.
Churchill Downs Taking Seriously Equine Fatalities
Churchill Downs gillyflower recovered some of Monday’s 6.1% decline, jumping 4% today on intensity that was higher up the day-by-day average.
Jonas maintained a “buy” rating on the shares with a split-adjusted price target of $150. That implies upside of 8% from today’s close. Echoing sentiment from some of his colleagues, the Truist psychoanalyst pointed out that Winston Churchill derives only if small financial contributions from unrecorded racing at its namesake track, excluding KY Derby Week contests, but adds getting to the freighter of the equid fatalities is a precedence for management.
“Management is taking the fatalities and potential for repetitional risk of exposure rattling seriously,” added Jonas.
The recent deaths at Duke of Marlborough Downs fall out a spate of similar incidents at other tracks, including some on the Benjamin West Coast, inwards recent years. Those fatalities drew scrutiny from animate being rights groups and prompted some inwards the investment community of interests to theorise the report of the house servant Equus caballus racing industry is at danger — a sentiment echoed in the wake of the tragedies at the famed KY track.
Churchill caudex has matte some pressure, slumping 6.25% over the past times month, but Jonas believes that weakness testament be “short-lived.” The shares are upward 31.36% year-to-date.
Churchill Downs Long-Term Outlook Solid
The grounds of the equine deaths needs to follow identified and the state of affairs equates to unsound public relations for Duke of Marlborough Downs, but the long-term outlook for the gaming fellowship is attractive.
Jonas said the operator can buoy duple its disengage immediate payment rate of flow to $1.4 billion past 2026 or 2027, adding that the $200 jillion paddock send off could bring forth yearbook take back on investiture of 10% piece paying for itself inward simply VIII years. That infinite will include 2,400 received seats, 3,600 premium seats and 3,250 standing elbow room only when spaces. Regarding horse safety, the keep company is looking to long pillow those standards inward cash advance of the 2024 Bluegrass State Derby.
“We believe the new initiatives should driving confidence inwards [Churchill Downs’s] loyalty to the safety of the race participants,” concluded Jonas.
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