• Mon. Jun 14th, 2021

Boyd Gaming Inventory Is Scorching, However Underappreciated, Says Analyst

BySpeed Casino

May 29, 2021

Posted on: Might 28, 2021, 12:47h. 
Final up to date on: Might 28, 2021, 03:03h.

Todd Shriber Learn Extra

Up 52.31% year-to-date, Boyd Gaming (NYSE:BYD) inventory is a star amongst gaming equities. However no less than one analyst says the on line casino operator might not be getting all of the adulation it deserves.

Boyd’s Gold Coast On line casino in Las Vegas. An analyst sees massive features forward for the inventory. (Picture: Las Vegas Overview-Journal)

In a brand new observe to shoppers, Stifel analyst Steven Wieczynski reiterates a “purchase” ranking on the Sam’s City operator, whereas lifting his value goal on the identify to $82 from $80. That means upside of about 28 p.c from the Might 27 shut. The analyst’s report follows investor day conferences with Boyd executives, together with CFO Josh Hirsberg.

We stroll away impressed with BYD’s execution, and to us, it appears traits throughout their Las Vegas Locals (LVL) and regional segments proceed to be sturdy,” stated Wieczynski.

The Las Vegas-based firm runs 28 gaming venues throughout 10 states, together with 11 in its dwelling metropolis. A number of of Boyd’s Sin Metropolis venues stay shuttered. However Nevada COVID-19 on line casino restrictions will probably be a factor of the previous on June 1, and site visitors traits are bettering in downtown Las Vegas, the place Boyd is the highest operator.
Wieczynski says the massive query that must be answered is how a lot of Boyd’s newly gained clientele is sticky, and the way sustainable that enterprise is. It’s a tricky question to reply at this juncture. However executives instructed the analyst that most of the firm’s rated gamers haven’t returned, and after they do, that may offset losses amongst newer, fleeting gamblers.
A Good Time to Take into account Boyd Inventory
A 9.57 p.c acquire this week however, Boyd inventory lately joined different gaming names to the draw back, shedding nearly 9 p.c from its April peak.

Nonetheless, shares of the Orleans operator are principally favored on Wall Road, with analysts highlighting industry-leading margin enlargement, energy in regional markets, pent-up demand from the 55+ demographic, and an usually ignored sports activities betting story. Mixed, these components could make it a great time to revisit Boyd inventory, significantly with it off its current highs.

“We consider now is a superb time to be doing work on this story. What we proceed to love probably the most concerning the BYD story within the close to time period is that it doesn’t have as a lot danger related to the sports activities betting/iGaming euphoria,” stated Wieczynski.
Boyd owns 5 p.c of FanDuel, giving it a low-risk avenue into the proliferation of sports activities wagering within the US, and a doable monetization software ought to Flutter Leisure spin-off the sportsbook operator.
Extra Causes to Like Boyd
Whereas many regional on line casino shares are gaining approval for margin enhancements within the wake of the coronavirus pandemic, the difficulty now turns into: can operators preserve these lofty margins and hold them at or above 2019 ranges?

Wieczynski believes Boyd can do exactly that, and even construct on current margin enhancements. Mix that with seniors getting vaccinated and returning to casinos, and the FanDuel “name possibility,” and Boyd stays probably the most catalyst-rich names within the gaming {industry}.

“Each catalyst we identified ought to assist drive free money stream increased,” stated the analyst. “We consider BYD can generate ~$4/share per 12 months shifting ahead, which ought to enable them to start out shopping for again shares once more or convey again the dividend. We consider BYD will finish the 12 months with internet leverage round 4x.”

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