Boyd Gaming Stock Is Hot, But Underappreciated, Says Analyst

Up 52.31% year-to-date, Boyd Gaming (NYSE:BYD) gunstock is a star among gaming equities. But at least one psychoanalyst says the gambling casino operator may not be getting all the adulation it deserves.

In a new tone to clients, Stifel analyst Steven Wieczynski reiterates a “buy” rating on the Sam’s Ithiel Town operator, patch lifting his terms point on the gens to $82 from $80. That implies upside of well-nigh 28 percent from the May 27 close. The analyst’s describe follows investor mean solar day meetings with Boyd executives, including CFO Josh Hirsberg.

We take the air off impressed with BYD’s execution, and to us, it seems trends crosswise their Las Vegas Locals (LVL) and regional segments proceed to live robust,” said Wieczynski.

The Las Vegas-based accompany runs 28 gaming venues crossways 10 states, including 11 inward its rest home city. Several of Boyd’s Sin City venues remain shuttered. But Battle Born State COVID-19 gambling casino restrictions will live a thing of the past tense on June 1, and traffic trends are improving in downtown Las Vegas, where Boyd is the pinch operator.

Wieczynski says the prominent head that needs to follow answered is how often of Boyd’s newly gained patronage is sticky, and how sustainable that business organization is. It’s a tough query to response at this juncture. But executives told the psychoanalyst that many of the company’s rated players haven’t returned, and when they do, that put up countervail losses among newer, fugitive gamblers.

A Good Time to Consider Boyd Stock

A 9.57 percent gain ground this week notwithstanding, Boyd caudex lately united other gaming names to the downside, sloughing almost 9 percent from its Apr peak.

Still, shares of the Orleans manipulator are mostly best-loved on Wall Street, with analysts highlighting industry-leading margin expansion, strength in regional markets, pent-up demand from the 55+ demographic, and an often overlooked sports betting story. Combined, those factors may do it an ideal clip to revisit Boyd stock, particularly with it turned its recent highs.

“We believe now is a outstanding time to be doing do work on this story. What we keep to similar the most well-nigh the BYD story inwards the near full term is that it doesn’t have as much risk associated with the sports betting/iGaming euphoria,” said Wieczynski.

Boyd owns Phoebe percent of FanDuel, gift it a low-risk boulevard into the proliferation of sports wagering inward the US, and a possible monetisation tool should Flutter Entertainment spin-off the sportsbook operator.

More Reasons to Like Boyd

While many regional casino stocks are gaining herald for margin improvements inwards the wake of the coronavirus pandemic, the come forth now becomes: can buoy operators defend those lofty margins and dungeon them at or above 2019 levels?

Wieczynski believes Boyd put up make just that, and still build on recent border enhancements. Combine that with seniors getting vaccinated and reverting to casinos, and the FanDuel “call option,” and Boyd remains 1 of the most catalyst-rich names inward the gaming industry.

“Every accelerator we pointed come out should aid thrust free cash flowing higher,” said the analyst. “We believe BYD canful generate ~$4/share per twelvemonth moving forward, which should reserve them to go buying indorse shares again or work back up the dividend. We believe BYD testament stop the yr with net purchase around 4x.”