What happened?
Shares of racing, gaming, and entertainment company Churchill Downs (NASDAQ: CHDN) jumped 9.3% in the afternoon session after the company reported record third-quarter revenue, net income, and adjusted EBITDA, raised its dividend, and approved a new $750 million share repurchase program. According to a company press release, Churchill Downs reported third-quarter net revenue of $696 million, up 2% from $683 million. Net income attributable to the company was $80 million, or $1.15 per diluted share, compared with $38 million, or 54 cents, a year earlier. Adjusted EBITDA was a record $264 million. The board declared a dividend of $0.469 per share, a 7% increase and the sixteenth consecutive annual increase. It also approved a new repurchase authorization of up to $750 million. That authorization includes, and is not in addition to, the $306 million still available under the July 2025 program as of the close on October 27, 2026.
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What is the market telling us
Churchill Downs’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 22 days ago when the stock dropped 5.2% on the news that 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.
Churchill Downs is down 20.2% since the beginning of the year, and at $89.37 per share, it is trading 24% 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 $777.10.
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