What Happened?
Shares of racing, gaming, and entertainment company Churchill Downs (NASDAQ:CHDN) fell 5.2% in the afternoon session after Mizuho analyst Ben Chaiken lowered the firm's price target on the company's shares to $125 from $157 while maintaining a rating on the stock. According to StreetInsider, Chaiken kept an Outperform rating and cut the target because of continued headwinds in Virginia from new gaming supply. He lowered his full-year EBITDA estimate to $1.24 billion, from $1.247 billion, which is also below the Street’s $1.252 billion.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Churchill Downs? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Churchill Downs’s shares are somewhat volatile and have had 10 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 6 months ago when the stock gained 7.8% on the news that the company reported first-quarter 2026 earnings that surpassed analyst expectations. The company posted adjusted earnings of $1.21 per share, a 20.4% beat over Wall Street's forecast of $1.00. Revenue for the quarter rose 3.2% year-over-year to $663 million, which met consensus estimates. The strong profit beat, despite in-line revenue, appeared to drive investor optimism. Furthermore, the company reported a significant improvement in its free cash flow margin, which increased to 38.5% from 25.9% in the same quarter last year, showcasing enhanced cash generation.
Churchill Downs is down 33.9% since the beginning of the year, and at $73.99 per share, it is trading 37.1% below its 52-week high of $117.59 from December 2025. Investors who bought $1,000 worth of Churchill Downs’s shares 5 years ago would now be looking at only $599.84.
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