Boyd Gaming Q2 Earnings Mixed, Analysts Remain Bullish

Shares of Boyd Gaming (NYSE: BYD) slipped Fri followers a tepid second-quarter earnings account that saw the regional cassino manipulator misses consensus estimates calling for earnings per divvy up of 7 cents. However, sell-side analysts remain bullish on the siege of Orleans operator.

There were some vivid spots inward Boyd’s June quarter report. Owing to toughened comparables, the company’s familiarised earnings before interest, taxes, depreciation, amortization, and restructuring or hire costs (EBITDAR) swayback modestly, but revenue rosebush 2.5% to $917 jillion spell iGaming top line of business ontogenesis came inwards at most 50%.

Despite some softness in the South, where Boyd operates regional casinos in Pelican State and Mississippi, analysts remain enthusiastic around the stock.

While investors remain aware of macro risks, we trust that BYD has suit investors’ preferred regional gaming inventory presumption its stable end-markets, good for you(p) counterbalance piece of paper and chapiter yield profile,” noted Philip Milton Roth MKM psychoanalyst Edward VII Engel.

Las Vegas-based Boyd concluded the sec quarter with hard cash on mitt of $260.8 1000000 and liabilities of $3 billion.

Multiple Sides to Boyd Gaming Investment Story

There are various, potentially competing sides to the Boyd investment funds thesis. As noted above, on that point was some softness at the operator’s Southern properties inward the 2nd quarter and the electric current billet is historically the weakest for the company.

Additionally, let down tier up bettors seem to follow scaling back up on cassino visits and with Boyd inventory acutely outperforming the broader market place this year, some investors could follow inclined to use up profits. Conversely, the regional casino operator is more and more a shareholder rewards story, potentially providing some refuge to investors. Importantly, Boyd has the resources to reenforcement buybacks and dividend growth.

“However, if flocking to safety is what investors testament get going gravitating to moving forward, based on BYD’s important FCF propagation and their pristine equipoise sheet, we believe BYD could live an outperformer inward the regional gaming infinite for the foreseeable future,” wrote Stifel analyst Steven Wieczynski inwards a note to clients. “With BYD shares showing an ~10% FCF yield, we believe it’s a affair of time before investors get on and read shares remain undervalued when compared to peers.”

He rates the gillyflower a “buy” with a damage point of $83, implying upside of to a greater extent than 23% from electric current levels.

Boyd Taking Cautious Approach to M&A

The gaming manufacture is place to a slew of consolidation rumors and Boyd itself has grown through and through acquisitions, but the manipulator emphasizes discipline in its go up to deal-making.

“We tend to follow very, rattling disciplined. And if there’s something interesting inwards the future, we could accept a looking at it,” said CEO Keith John Smith in a response to an analyst head on the firm’s earnings conference call. “But we’re not going come out of our way to kind of to do anything, but we get grown. It is our story to farm through acquisitions, but we testament be — carry on to follow very disciplined.”

With its flourishing iGaming business and recent launch of that offering inwards New island of Jersey and Pennsylvania, it’s possible Boyd considers acquisitions on that forepart over buying to a greater extent land-based casinos, but that’s speculation for the time being.

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