Shares of Boyd Gaming (NYSE: BYD) were trending upward early Tuesday after a sell-side analyst upgraded the stock.
In a recent report to clients, Argus analyst John Staszak upgraded his rating on the regional casino operator to “buy” from “hold,” while establishing a 12-month price target of $90. This suggests a potential increase of 22% from the closing price of $73.76 on Monday.
"Over the long term, we expect Boyd’s operating margin to increase as a result of favorable operating leverage at the Las Vegas properties and some of the regional casinos,” observed Staszak. “Reflecting the company’s extensive development pipeline, our long-term earnings growth rate estimate is 12%, down from a prior estimate of 18%.”
Con sede en Las Vegas, Boyd opera 10 establecimientos de juegos en su mercado local, incluyendo Aliante, California, Cannery, Fremont, Gold Coast, Jokers Wild, Main Street Station, Sam's Town, Suncoast y The Orleans. It also runs regional casinos in Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio, and Pennsylvania.
Las Vegas and Other Markets Propelling Optimistic Boyd Outlook
In Las Vegas, Boyd is the leading casino operator in the downtown area and one of the biggest brands in the local Las Vegas market.
Staszak emphasized the strength in those areas along with the vitality at the company's gaming locations in the Midwest and South. In particular, Staszak noted an increase in foot traffic at the Ameristar St. Charles and the Gold Coast, which is a casino hotel located off the Strip in Las Vegas.
Boyd is enhancing its regional diversity by developing a casino hotel in Norfolk, Virginia, in collaboration with the Pamunkey Indian Tribe. Construction has recently commenced on the site, and certain analysts think the $750 million facility aims to reduce the chances of Boyd obtaining a pre-existing casino to enhance its presence in the mid-Atlantic region.
In Las Vegas, Boyd is improving the Suncoast and preparing the Cadence Crossing Casino — actions that could be beneficial given the rising competition in the local market.
Boyd's Stake in FanDuel Announced
Staszak highlighted that Boyd is gaining advantages from its partnership with FanDuel, a division of Flutter Entertainment (NYSE: FLUT). Boyd possesses the 5% of FanDuel that isn't controlled by the Irish gaming firm, and this is frequently ignored as a call option for Boyd considering FanDuel's position as the biggest online sportsbook operator in the US.
Boyd has maintained a partnership with FanDuel for seven years, and during that period, the latter's worth has increased, leading to a similar rise in the regional casino operator's investment. Boyd operates its own sports betting platform in Nevada, where FanDuel is not active, and the two companies maintain a marketing partnership in other states.
Boyd began Tuesday with a year-to-date increase of 17.81%, positioning it among the top-performing gaming stocks of 2024.