Traders Buy High Volume of Churchill Downs Put Options (NASDAQ:CHDN)

Key Points

• Traders bought an unusual volume of puts — about 7,000 contracts, roughly a 1,122% increase versus the typical daily put volume of 573 — signaling notable bearish bets or hedging activity on CHDN.
• Churchill Downs recently beat quarterly estimates with $0.97 EPS vs. $0.85 expected and $665.9M revenue (up 6.7% year-over-year), and analysts maintain a consensus “Moderate Buy” with an average price target of $135.
• The stock traded up 2.3% to $90.56 on light volume (74,229 vs. avg. 920,014) and is largely institutionally held (about 82.6% ownership), leaving it well below analyst target levels.

Churchill Downs, Incorporated (NASDAQ:CHDN - Get Free Report) was the recipient of some unusual options trading on Wednesday. Investors bought 7,000 put options on the stock. This represents an increase of approximately 1,122% compared to the typical daily volume of 573 put options.

Churchill Downs Stock Up 2.3%

CHDN traded up $2.05 on Wednesday, hitting $90.56. The company had a trading volume of 74,229 shares, compared to its average volume of 920,014. The company has a debt-to-equity ratio of 5.02, a quick ratio of 0.60 and a current ratio of 0.60. The stock has a market capitalization of $6.31 billion, a price-to-earnings ratio of 17.19, a P/E/G ratio of 1.48 and a beta of 0.65. The stock has a fifty day moving average price of $90.26 and a 200-day moving average price of $99.23. Churchill Downs has a 12-month low of $80.24 and a 12-month high of $118.46.

Churchill Downs (NASDAQ:CHDN - Get Free Report) last issued its quarterly earnings results on Wednesday, February 25th. The company reported $0.97 earnings per share for the quarter, topping the consensus estimate of $0.85 by $0.12. The business had revenue of $665.90 million during the quarter, compared to the consensus estimate of $658.01 million. Churchill Downs had a return on equity of 43.26% and a net margin of 13.09%.The company's quarterly revenue was up 6.7% on a year-over-year basis. During the same quarter last year, the company earned $0.92 earnings per share. Analysts predict that Churchill Downs will post 6.92 EPS for the current fiscal year.

Institutional Investors Weigh In On Churchill Downs

Several institutional investors have recently added to or reduced their stakes in the business. Farmers National Bank acquired a new stake in Churchill Downs in the fourth quarter worth about $230,000. MidFirst Bank acquired a new stake in Churchill Downs in the fourth quarter worth about $219,000. DGS Capital Management LLC acquired a new stake in Churchill Downs in the fourth quarter worth about $202,000. Invesco Ltd. boosted its holdings in Churchill Downs by 8.0% in the fourth quarter. Invesco Ltd. now owns 169,001 shares of the company's stock worth $19,229,000 after acquiring an additional 12,539 shares in the last quarter. Finally, Corient Private Wealth LLC boosted its holdings in Churchill Downs by 786.6% in the fourth quarter. Corient Private Wealth LLC now owns 56,922 shares of the company's stock worth $6,477,000 after acquiring an additional 50,502 shares in the last quarter. Institutional investors and hedge funds own 82.59% of the company's stock.

Wall Street Analysts Forecast Growth

Several equities analysts have recently commented on CHDN shares. Citigroup restated an "outperform" rating on shares of Churchill Downs in a research note on Wednesday, January 14th. Jefferies Financial Group reiterated a "buy" rating on shares of Churchill Downs in a research note on Wednesday, December 24th. Citizens Jmp lifted their target price on Churchill Downs from $142.00 to $146.00 and gave the company a "market outperform" rating in a research note on Wednesday, January 14th. Finally, Wells Fargo & Company cut their target price on Churchill Downs from $125.00 to $124.00 and set an "overweight" rating on the stock in a research note on Friday, February 27th. Eleven research analysts have rated the stock with a Buy rating and one has assigned a Hold rating to the stock. Based on data from MarketBeat.com, Churchill Downs presently has a consensus rating of "Moderate Buy" and an average price target of $135.00.

About Churchill Downs

Churchill Downs Incorporated is a leading American entertainment and gaming company best known for operating the Churchill Downs racetrack in Louisville, Kentucky, home of the annual Kentucky Derby. Beyond its signature thoroughbred racing venue, the company manages a diversified portfolio of live racing facilities, casinos, and off-track betting operations. Its services encompass pari-mutuel wagering, historical horse racing machines, and online betting through its TwinSpires platform, reaching horse racing and sports betting enthusiasts nationwide.

In its live racing segment, Churchill Downs oversees a network of racetracks and racing festivals, offering year-round events in multiple states.

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