Boyd Gaming Boosted by Argus Upgrade

Posted on: December 17, 2024, 08:44h. 

Last updated on: December 17, 2024, 09:03h.

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

Shares of Boyd Gaming (NYSE: BYD) were pointed higher early Tuesday following an upgrade of the stock by a sell-side analyst.

Boyd Gaming
Boyd Gaming’s Orleans Casino. Argus Research upgraded the stock on Tuesday. (Image: KTNV)

In a new report to clients, Argus analyst John Staszak lifted his rating on the regional casino operator to “buy” from “hold” while setting a 12-month price target of $90. That implies upside of 22%  from Monday’s closing price of $73.76.

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%.”

Las Vegas-based Boyd runs 10 gaming venues in its home market, including Aliante, California, Cannery, Fremont, Gold Coast, Jokers Wild, Main Street Station, Sam’s Town, Suncoast, and The Orleans. It also operates regional casinos in Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio, and Pennsylvania.

Las Vegas, Other Markets Driving Positive Boyd View

In Las Vegas, Boyd is the dominant casino operator downtown, as well as one of the largest names in the Las Vegas locals segment.

Strength in those segments coupled with vibrancy at the company’s gaming venues in the Midwest and the South were highlighted by Staszak. Specifically, Staszak mentioned elevated foot traffic at the Ameristar St. Charles and the Gold Coast, an off-Strip casino hotel in Las Vegas.

Boyd is furthering its regional diversity via a casino hotel in Norfolk, Va., a project on which the company is partnering with the Pamunkey Indian Tribe. Ground was recently broken on the site and some analysts believe the $750 million venue serves the objective of diminishing the likelihood of Boyd acquiring an established casino to bolster its mid-Atlantic footprint.

In Las Vegas, Boyd is enhancing the Suncoast and planning the Cadence Crossing Casino — moves that could prove advantageous amid increasing competition in the locals’ segment.

Boyd FanDuel Stake Heralded

Staszak also noted that Boyd is accruing benefits from its relationship with FanDuel, which is a unit of Flutter Entertainment (NYSE: FLUT). Boyd owns the 5% of FanDuel not controlled by the Irish gaming company, and that’s an oft-overlooked call option for Boyd given FanDuel’s status as the largest online sportsbook operator in the US.

Boyd has had a relationship with FanDuel for seven years and over that time, the latter’s value has surged, meaning the regional casino operator’s stake has done the same. Boyd has its own sports betting platform in Nevada where FanDuel isn’t operational, and the two companies have a marketing relationship in other states.

Boyd entered Tuesday with a year-to-date gain of 17.81%, making it one of 2024’s best-performing gaming equities.