Updated Aug 6 at 2:14pm ET.
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VICI's subsidiary priced a public offering of $1.75 billion in senior unsecured notes, which are debts that are not backed by specific collateral. The offering includes $900 million of notes due in 2031 with a 5.4 percent interest rate.
For a real estate company like VICI, raising cash this way is a routine part of managing its balance sheet. It allows the firm to pay off older debts or fund new property purchases. While it adds to the total debt, the interest rates are in line with current market levels and help the company maintain its growth strategy.
Source: Business Wire
VICI reported revenue of $1.06 billion for the quarter, slightly ahead of what analysts expected. While net income fell to $0.48 per share, this was largely due to a technical accounting change in how the company sets aside money for potential credit losses. A more helpful measure for real estate firms, adjusted funds from operations, rose about 8 percent to $679.6 million.
The company is successfully branching out from its core Las Vegas casino roots. It recently added new tenants like Club Med and Golden Entertainment to its roster. This diversification is important because it reduces the risk of being too dependent on a single industry, while the 100 percent occupancy rate shows that its existing properties remain in high demand.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Morgan Stanley maintained its Equal Weight rating, which means they think the stock will perform roughly in line with the broader market. However, they cut their price target significantly from $38 down to $31.
A target cut of this size often reflects a change in how analysts view the company's growth prospects or the impact of higher interest rates on real estate values. Even with the lower target, the new $31 level is still higher than where the stock currently sits today today.}'s stock price is trading.
Source: Morgan Stanley
Analysts recently lowered their price targets for VICI following the company's second-quarter earnings report. Most analysts remain positive, with 20 of 26 rating the stock a buy and an average target price suggesting 14% upside from today.
The company has a mixed track record of meeting profit targets, but it consistently grows its revenue by adding new properties and raising rents on existing ones.
| Expectation | |
|---|---|
| EPS | $0.72 |
| Revenue | $1.05B |
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