Unfiltered Take on Boyd Gaming's Outlook
Stock Analyst Recommends Buying Shares of Boyd Gaming
Hello, folks! Let's dive into the latest buzz on Boyd Gaming, the popular casino operator, as featured in this week's Jefferies Equity Research analysis.
Jefferies has deemed it fit to upgrade Boyd Gaming's rating from Hold to a Strong Buy! The reason? Well, according to analyst David Katz, the investor meetings bring refreshing insights into the casino game that support their optimistic stance.
"The gist is that the business has stood its ground in both Midwest and South and Las Vegas, maintaining its fundamentals on a like-for-like basis," Katz said. However, the first-quarter results weren't all rosy, with factors like the Super Bowl, leap year, and high hold impairing volume and margins, he added.
In Las Vegas, this year's performance faces comparisons with 2024 when Red Rock Resorts opened the Durango Casino & Resort. As competitors stepped up their promotions to compensate for Red Rock's move, the challenge became real for Boyd Gaming.
But Katz suggests that their flattish estimates for the second quarter are just peachy, given the current state of affairs. Management's emphasis on financial discipline in mergers, acquisitions, internal investments, and share repurchases is impressive, he shared.
"The deal with FanDuel, while not yet recognized in the shares, is a productive two-way relationship," Katz noted. With the contract expiring in 2028, both parties can agree on mutually beneficial terms if the need arises. Until then, the potential value is a precious hidden gem.
Jefferies values this missing piece at $7 per share, hinting at the significant growth potential of Boyd Gaming's digital offerings, particularly within the burgeoning online gaming market. As for the traditional casino market, while growth may not come easy, Boyd Gaming is poised to make the most of whatever opportunities present themselves.
Their impressive earnings growth over the last few years, with a CAGR of 56.77%, is a testament to their shrewd financial management. Moreover, their strategic decision to introduce Agilysys' point-of-sale system across 28 properties underscores their commitment to enhancing operational efficiency and customer experience.
Katz did mention that the casino industry as a whole has posed challenges, but he believes that Boyd Gaming manages to shine even among its peers. And with a price target of $84 from Jefferies, it seems the market agrees!
So there you have it - Jefferies' bullish outlook on Boyd Gaming makes it an exciting gambling proposition. Buckle up for potential growth in the digital gaming sphere and watch how they leverage their partnership with FanDuel to strike it big!
- In the context of Boyd Gaming's partnership with FanDuel, analyst David Katz noted, "The deal with FanDuel, while not yet recognized in the shares, is a productive two-way relationship."
- Despite challenges faced in the casino-and-gambling industry, Boyd Gaming's strategic position, as suggested by Jefferies, makes it an enticing business proposition within the burgeoning online casino-games market.
