Red Rock Resorts Inc (RRR.O): Solid Q1; Tough March/Better April; Tough Comps into Q2

Research evidence excerpt

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05 Aug 2026 06:40:48 ET │ 16 pages

Red Rock Resorts Inc (RRR.O)

Solid Q1; Tough March/Better April; Tough Comps into Q2

CITI'S TAKE

RRR shares were up ~1% after-market on Tuesday following an across-theboard beat, in that while the 2Q results were significantly better than what

was anticipated coming out of 1Q, the improved market trends were well

telegraphed coming into Tuesday. RRR continues to demonstrate a unique

consumer value proposition in the context of the Las Vegas market, a

proposition that was on display again during the World Cup tournament.

Following the 2Q results, our estimates are up modestly, while our price

target is again going higher, from $73 to $78 (12.5x our 2027 EBITDA).

RRR reported 2Q26 Adjusted EBITDA of $208M, above our estimate of $205M (11% y/y) and Street's $198M (-14% y/y), and $21M worse than last year's $229M.

2Q26 net revenues of $510M were -3% y/y, beating the Street's $499M (-5% y/y)

and our estimate of $508M (-3% y/y). Consolidated Adjusted EBITDA margin

of 40.8% was -280 bps y/y, above our estimate of 40.3% (-328 bps y/y) and

Street's 39.6% (-400 bps y/y).

Revenue fell 3% y/y due to the disruption caused by renovation in the Green Valley

Ranch. With a loss of 21K room nights, the Rooms segment fell ~9% y/y and had a

knock-on effect on the F&B segment too (-1.4%y/y). Casino revenue was down y/y

despite 2Q26 posting the second best Q2 result in the company’s history as a result

of the previous year being the best.

n

Buy

Price (04 Aug 26 16:00)

US$64.27

Target price

US$78.00↑

from US$73.00

Expected share price return

21.4%

Expected dividend yield

3.2%

Expected total return

24.5%

Market Cap

US$6,707M

Price Performance

(RIC: RRR.O, BB: RRR US)

Management’s tone sounded positive with specific renovations coming online

and receiving positive feedback. The new Gaudi Bar in Sunset Station was received

well by customers, and management was pleased with the financial performance.

Reinforcing managements plan to continue growth. The East Green Valley Ranch

Tower is expected to come online in the coming weeks, with the property expected

to come online in 4Q26 and construction to finish in 2027.

…