Churchill Downs (NASDAQ:CHDN) Shares Gap Up After Better-Than-Expected Earnings

Key Points

• Churchill Downs beat quarterly expectations: EPS was $1.23 versus the $1.13 consensus, while revenue reached $696 million, up 1.9% year over year and slightly above estimates. Shares opened at $86.63 after previously closing at $81.95.
• Shareholder returns and growth initiatives strengthened: The company raised its annual dividend to $0.469 per share and approved a new $750 million share-repurchase program. It also received local approval to relocate a historical racing machine venue in Virginia.
• Analysts remain broadly positive: Ten analysts rate CHDN a Buy and one rates it a Hold, producing a “Moderate Buy” consensus and an average price target of $129.22.

Churchill Downs, Incorporated (NASDAQ:CHDN - Get Free Report) gapped up prior to trading on Thursday following a stronger than expected earnings report. The stock had previously closed at $81.95, but opened at $86.63. Churchill Downs shares last traded at $89.21, with a volume of 320,802 shares.

The company reported $1.23 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.13 by $0.10. The business had revenue of $696.00 million during the quarter, compared to analyst estimates of $695.16 million. Churchill Downs had a return on equity of 42.16% and a net margin of 13.82%. Churchill Downs's revenue for the quarter was up 1.9% on a year-over-year basis. During the same quarter in the previous year, the company posted $1.09 earnings per share.

Churchill Downs Increases Dividend

The company also recently disclosed an annual dividend, which will be paid on Tuesday, January 5th. Stockholders of record on Friday, December 4th will be issued a dividend of $0.4690 per share. This is a positive change from Churchill Downs's previous annual dividend of $0.4380. The ex-dividend date of this dividend is Friday, December 4th. This represents a dividend yield of 57.0%. Churchill Downs's payout ratio is currently 7.38%.

Key Headlines Impacting Churchill Downs

Here are the key news stories impacting Churchill Downs this week:

• Positive Sentiment: Expanded $750 million share repurchase: Churchill Downs approved a new buyback program, which could reduce shares outstanding, support earnings per share and signal that management views the stock as attractively valued. Churchill Downs Announces New $750 Million Share Repurchase Program
• Positive Sentiment: Quarterly EPS topped estimates: Third-quarter earnings were $1.23 per share, above the $1.13 analyst consensus cited by MarketBeat and up from $1.09 a year earlier. Revenue of $696 million was slightly ahead of estimates of approximately $695.2 million, while year-over-year sales increased 1.9%. Churchill Downs Incorporated Reports 2026 Third Quarter Results
• Positive Sentiment: Dividend increased: The company declared an annual dividend of $0.469 per share, payable January 5, 2027, representing a 7.1% increase from the prior $0.438 dividend. The payout provides an additional shareholder-return catalyst, though the indicated yield is modest. Churchill Downs Declares Annual Cash Dividend
• Positive Sentiment: Growth project received local approval: Churchill Downs can relocate its historical racing machine entertainment venue in Henry County, Virginia, potentially supporting future regional gaming revenue. Churchill Downs Receives Approval for Virginia HRM Venue
• Neutral Sentiment: Board and racing initiatives: Michael Tucker was appointed to the board, while Churchill Downs and NYRA expanded their 2027 Thoroughbred Championship Series. These moves may support governance and industry engagement but are unlikely to materially affect near-term earnings. Churchill Downs Appoints Michael Tucker

Analyst Ratings Changes

Several brokerages have issued reports on CHDN. Weiss Ratings upgraded Churchill Downs from a "sell (d+)" rating to a "hold (c-)" rating in a research report on Wednesday, September 2nd. Stifel Nicolaus set a $132.00 price target on Churchill Downs and gave the company a "buy" rating in a report on Tuesday. JPMorgan Chase & Co. lowered their target price on Churchill Downs from $123.00 to $118.00 and set an "overweight" rating for the company in a report on Tuesday, October 20th. Wolfe Research initiated coverage on Churchill Downs in a report on Wednesday, September 2nd. They issued an "outperform" rating and a $119.00 price objective for the company. Finally, Truist Financial lowered their price objective on shares of Churchill Downs from $145.00 to $140.00 and set a "buy" rating for the company in a research note on Tuesday, October 20th. Ten analysts have rated the stock with a Buy rating and one has given a Hold rating to the stock. According to data from MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and a consensus price target of $129.22.

Hedge Funds Weigh In On Churchill Downs

Several institutional investors and hedge funds have recently bought and sold shares of CHDN. Engineers Gate Manager LP raised its holdings in Churchill Downs by 118.8% in the 2nd quarter. Engineers Gate Manager LP now owns 54,890 shares of the company's stock valued at $4,920,000 after buying an additional 29,807 shares during the period. BlackRock Inc. acquired a new position in Churchill Downs during the 2nd quarter worth about $555,948,000. Bridger Management LLC acquired a new position in shares of Churchill Downs in the second quarter valued at approximately $5,126,000. Aurora Investment Counsel acquired a new position in shares of Churchill Downs during the second quarter worth about $2,265,000. Finally, First Trust Advisors LP grew its holdings in Churchill Downs by 178.9% during the 1st quarter. First Trust Advisors LP now owns 76,395 shares of the company's stock worth $6,863,000 after acquiring an additional 49,002 shares in the last quarter. 82.59% of the stock is owned by hedge funds and other institutional investors.

Churchill Downs Price Performance

The firm has a market capitalization of $6.16 billion, a price-to-earnings ratio of 15.22, a price-to-earnings-growth ratio of 0.88 and a beta of 0.77. The stock's fifty day moving average price is $82.89 and its two-hundred day moving average price is $88.42. The company has a current ratio of 0.36, a quick ratio of 0.36 and a debt-to-equity ratio of 3.06.

Churchill Downs Company Profile

Churchill Downs Incorporated NASDAQ: CHDN is a gaming, racing and entertainment company best known for operating Churchill Downs Racetrack in Louisville, Kentucky, the home of the Kentucky Derby. The company traces its history to the opening of Churchill Downs in 1875 and has expanded its operations beyond traditional Thoroughbred racing.

Its business activities include live and historical horse racing, pari-mutuel wagering, casino gaming, video lottery and related entertainment offerings.

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