Baird has lowered its price target for VICI Properties (VICI) to $34 following the company's latest earnings report, reflecting growing caution on near-term growth prospects. The move impacts investor sentiment across the REIT and gaming real estate sectors.
- Baird lowered VICI Properties' price target to $34
- Q4 AFFO per share: $1.58, below $1.60 analyst consensus
- Same-store NOI growth: 1.2%, down from 3.5% year-over-year
- Debt-to-EBITDA ratio increased to 6.1x
- VICI stock declined 2.3% post-earnings report
- WYNN and MGM also posted modest declines following the update
Baird has reduced its price target for VICI Properties (VICI) to $34 from a previous level, citing concerns around near-term operational performance and capital allocation following the REIT’s most recent earnings release. The adjustment comes amid mixed results in the company’s portfolio, particularly in relation to its gaming and hospitality assets, including properties managed by WYNN Resorts and MGM Resorts International. VICI reported adjusted funds from operations (AFFO) per share of $1.58 for the quarter, slightly below the $1.60 consensus estimate, prompting a reassessment of growth assumptions. The downgrade reflects a broader caution over the pace of leasing renewals and tenant performance across the portfolio. VICI’s same-store net operating income (NOI) growth for the quarter was 1.2%, significantly below the 3.5% growth seen in the prior year, signaling potential headwinds in tenant demand and pricing power. Additionally, the company’s debt-to-EBITDA ratio rose to 6.1x, up from 5.8x in the prior quarter, raising concerns about leverage management amid rising interest rates. The market responded with a 2.3% decline in VICI’s stock price the day after the report, underperforming a broadly flat S&P 500. WYNN Resorts (WYNN) and MGM Resorts International (MGM) also saw modest declines, with WYNN down 1.8% and MGM off 1.5%, indicating investor concern over the broader gaming real estate ecosystem. The move underscores the sensitivity of REIT valuations to tenant performance and macroeconomic conditions in the hospitality and gaming sectors.