Stifel has moved Codere Online Luxembourg S.A. (NASDAQ: CDRO) from a Buy to a Hold rating and cut its price target to $8.50 from $9.00, attributing the change to an announced rise in Mexico’s gambling tax. The brokerage group flagged the increase - from 30% to 50% effective January 1 - as a significant headwind for profitability in Codere’s fastest-growing market and said estimates and valuation require adjustment to reflect the new tax environment.
The reduced $8.50 price target equates to roughly 7.5% upside relative to a quoted share price of $7.91. InvestingPro data cited alongside Stifel’s commentary indicates Codere is trading above its Fair Value, while also showing the company delivered robust gross profit margins of 91.15% and remained profitable over the last twelve months.
Stifel acknowledged that Codere Online continues to benefit from an expanding total addressable market in its core territories, particularly Spain and Mexico, and from market share that is stable to expanding. The firm noted both markets are less penetrated than mature European markets, a dynamic that has supported growth - InvestingPro reports 7.83% revenue growth for Codere over the past twelve months.
To offset the impact of Mexico’s higher tax, Stifel expects Codere to seek expense relief by trimming promotions and marketing spending and through renegotiations with major suppliers such as Playtech. The analyst team cautioned, however, that these measures may deliver only limited relief through 2027, as Codere is strategically allocating resources to user acquisition around the 2026 World Cup.
Stifel also flagged market structure and operating complexities as potential barriers to new competition in Mexico despite the tax rise, noting market share concentration with the top three players estimated to control more than 80% of the market.
In recent corporate reporting, Codere Online disclosed third-quarter 2025 results showing net gaming revenue of 52 million, flat year-over-year, while adjusted EBITDA nearly doubled to 2.9 million. The company identified headwinds including peso devaluation and regulatory challenges in Colombia but said it maintained disciplined cost control and healthier unit economics.
The article also references prior analyst coverage: Stifel has been reported as lowering a prior price target to $9.00 after third-quarter results missed expectations by 8%, while Benchmark reiterated a Hold rating, pointing to improved adjusted EBITDA despite flat net gaming revenue.
Separately, Codere Online’s shareholders approved governance measures at an extraordinary meeting, including the appointment of Oscar Iglesias to the board of directors and an extension of the companys share repurchase authorization through December 31, 2026. Management said it will continue to focus on cutting marketing expenses and improving operational efficiency.
Contextual note: The reporting above reflects the data and analyst commentary provided. It includes both the recent downgrade by Stifel to Hold with a $8.50 target and prior references to Stifels earlier pricing actions related to quarterly results, as reported.