Boyd Gaming Backed by Analyst Ahead of Nevada Reopening

Posted on: June 2, 2020, 09:42h. 

Last updated on: June 2, 2020, 12:13h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Boyd Gaming (NYSE:BYD) drew some praise from a sell-side analyst today ahead of the June 4 reopening of Nevada casinos.

Boyd Backed By Analyst
Las Vegas reopening is just one reason to like Boyd Gaming stock. Regional restarts help, too, says an analyst. (Image: KXNT Radio)

In a note to clients Tuesday, Nomura Instinet analyst Harry Curtis reiterated a “buy” rating on the Orleans operator, while boosting his price target on the stock to $29 from $22. Shares of Boyd trade at $22 at this writing. Recently, Curtis is consistently endorsing regional gaming equities, a thesis that’s bearing fruit as casinos in the Midwest and South come back online following the coronavirus shutdown that spanned roughly two months.

During the COVID crisis, we have recommended that investors in US Gaming BUY two stocks ahead of regional casinos’ reopening, BYD and PENN,” said the Instinet analyst.

“PENN” refers to Penn National Gaming (NASDAQ:PENN), a name that Curtis reaffirmed a “buy” rating on last week with a significant, upward price forecast revision. He cited catalysts such as the operator’s exposure to iGaming and its investment in Barstool Sports.

Betting on Boyd

From June 1 through June 4, Boyd will reopen 13 of its gaming properties, including nine in Las Vegas. The company owns and operates a dozen Sin City venues, and previously said the East Side Cannery, Eldorado, and Main Street Station will restart after June 4. But a specific date for those properties wasn’t provided.

In broad fashion, investors are displaying enthusiasm for casino reopenings. That’s highlighted by Boyd stock being higher by more than 32 percent over the past month, and having more than tripled off its 52-week low.

The company operates 29 casinos in 10 states, and investors bid the stock higher amid reopenings of Boyd’s Louisiana and Mississippi venues, among others.

“Since the first regional casinos in MS and LA reopened nearly two weeks ago, both stocks have outperformed the 7% recovery in the S&P, with PENN + ~80% and BYD +37%,” said Curtis, the Instinet analyst. “Last week, we called out the strengths of PENN again, and we lifted our estimates and target price. This week, we do the same for BYD.”

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Boyd owns a total of seven gaming properties in Louisiana and Mississippi. On Monday, the company’s Ameristar St. Charles and Ameristar Kansas City in Missouri, and the Diamond Jo Dubuque and Diamond Jo Worth in Iowa reopened.

Accounting for the nine reopenings in Las Vegas happening on Thursday, 21 of Boyd’s 29 casinos will be open for business by the end of this week. Indiana, where the company runs the Belterra and Blue Chip, is slated to reopen gaming venues in mid-June.

However, it’s not all good news for Boyd and some competitors. Confirming that the coronavirus shutdown was a major blow to the domestic gaming industry, Boyd notified employees last week that 25 percent to 60 percent of the company’s workforce could be laid off, and for those eligible for retraining into other roles, that process could take up to six months.

Those headcount reductions could affect more than 10,300 workers. Casinos that are reopening are implementing social distancing protocols to prevent a second wave of COVID-19 cases. That includes limiting the number of players at slots and table games, meaning pre-virus staffing levels aren’t economical for operators.