VICI Properties: I'm Flipping From Buy To Sell (Archive, Full Access)
A hawkish rate environment and rising inflation that exceeds the cap of annual rent escalators are a major headwind.
This 5-Minute Pitch was originally published on Seeking Alpha. It is shared here to showcase my work and track record. I also publish full 5-Minute Pitches on this site. This will be behind a paywall, accessible to Hunter Tier members.
Elevator Pitch
- VICI Properties Inc. faces higher refinancing costs as upcoming debt maturities could be repriced materially above their current fixed coupons.
- VICI’s mostly capped rent escalators may not preserve real rental income if inflation remains above 3%.
- Non-gaming growth initiatives increase VICI’s exposure to development, borrower credit, and asset performance risk.
- Softer Las Vegas tourism and weak consumer sentiment could eventually pressure tenant credit quality, despite resilient Las Vegas Strip gaming revenue so far.
- VICI trades at a substantial discount to historical and sector valuation multiples. But I place more weight on the fundamental headwinds and weak technical price action.
Read the full article here.
