What Happened?
Shares of casino resort and entertainment company Red Rock Resorts (NASDAQ: RRR) jumped 3.3% in the morning session after Truist Securities upgraded the casino operator's stock to "Buy" from "Hold" and significantly raised its price target.
Truist boosted its price target on the shares to $67 from $45, suggesting a considerable upside from the stock's current levels. The analyst cited the strength of the Las Vegas locals market, which is benefiting from favorable population trends.
According to Truist, Red Rock is capitalizing on a "flight to quality" more than anticipated and is experiencing less disruption from construction than previously feared. The upgrade also pointed to a new "No Tax On Tips" law as a positive development for the Las Vegas market, which could potentially add $80 million to $85 million in discretionary income for consumers. This improved outlook from a Wall Street analyst has provided a clear catalyst for the stock's advance.
After the initial pop the shares cooled down to $54.99, up 0.1% from previous close.
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What Is The Market Telling Us
Red Rock Resorts’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about 2 months ago when the stock gained 5.8% on the news that the major indices rebounded (Nasdaq +2.0%, S&P 500 +1.5%) as President Trump postponed the planned 50% tariff on European Union imports, shifting the start date to July 9, 2025. Companies with substantial business ties to Europe likely had some relief as the delay reduced near-term cost pressures and preserved cross-border demand.
Red Rock Resorts is up 23% since the beginning of the year, but at $54.99 per share, it is still trading 10.2% below its 52-week high of $61.24 from July 2024. Investors who bought $1,000 worth of Red Rock Resorts’s shares 5 years ago would now be looking at an investment worth $4,771.
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