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Strength Seen in Bally's (BALY): Can Its 25.1% Jump Turn into More Strength?

Zacks Equity Research
·2-min read

Bally's Corporation (BALY) shares soared 25.1% in the last trading session to close at $16.91. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 15.7% gain over the past four weeks.

Bally’s Corporation shares surged on the news of its merger agreement with Standard General L.P., valued at approximately $4.6 billion. The agreement involves combining Bally’s with The Queen Casino & Entertainment Inc., a regional casino operator. The combination will expand the Company’s Casino & Resorts segment to 19 gaming, entertainment and hospitality facilities across 11 U.S. states and enhance the Company’s development pipeline with several projects. Through the initiative Bally’s anticipates additional revenue and EBITDAR growth along with value accretion by 2025.

This hotel casino operator is expected to post quarterly loss of $1.47 per share in its upcoming report, which represents a year-over-year change of -488%. Revenues are expected to be $644.39 million, up 6.3% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Bally's, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on BALY going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Bally's belongs to the Zacks Hotels and Motels industry. Another stock from the same industry, Hilton Worldwide Holdings Inc. (HLT), closed the last trading session 0.7% lower at $213.18. Over the past month, HLT has returned 0.7%.

Hilton Worldwide's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.85. Compared to the company's year-ago EPS, this represents a change of +13.5%. Hilton Worldwide currently boasts a Zacks Rank of #3 (Hold).

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Bally's Corporation (BALY) : Free Stock Analysis Report

Hilton Worldwide Holdings Inc. (HLT) : Free Stock Analysis Report

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Zacks Investment Research