Boyd Gaming Shares Surge After Upgrade: Analyst Predicts 22% Price Increase as Casino Operations Thrive
Shares of Boyd Gaming Corporation (NYSE: BYD) are experiencing a positive trend early Tuesday following a stock upgrade from Argus Research, which has increased its rating on the regional casino operator from “hold” to “buy.” This upgrade comes with an impressive 12-month price target of $90, indicating a potential upside of approximately 22% based on Monday’s closing price of $73.76.
Analyst Insight on Long-term Growth
In a recent report, Argus analyst John Staszak provided insights into Boyd Gaming’s operational outlook. He noted, “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.” Staszak revised the long-term earnings growth rate estimate from 18% to a still-robust 12%, reflecting the extensive development plans the company has in place.
Boyd Gaming, headquartered in Las Vegas, operates a total of 10 gaming venues within the city, which include popular destinations such as Aliante, California, Cannery, and The Orleans. Beyond Las Vegas, the company’s footprint extends to regions across the Midwest and South, with casinos in states like Illinois, Indiana, and Pennsylvania.
Strong Presence in Las Vegas and Regional Markets
Staszak highlighted Boyd Gaming’s stronghold in the Las Vegas market, particularly its dominant position in downtown and its significant presence in the locals market. He noted increased foot traffic at both the Ameristar St. Charles and Boyd’s Gold Coast casino. Such vibrant activity contributes to a favorable environment for the company as it navigates through competitive pressures in the gaming industry.
Furthermore, Boyd is advancing its regional diversification strategy with a new casino hotel project in Norfolk, Virginia, in collaboration with the Pamunkey Indian Tribe. Groundbreaking has recently taken place for this $750 million venue, which is viewed as a strategic move to expand Boyd’s influence in the mid-Atlantic region without resorting to acquiring existing casinos.
Enhancements and New Developments in Las Vegas
In Las Vegas, Boyd is also enhancing its existing properties, including improvements to the Suncoast and plans for a new venture called Cadence Crossing Casino. These developments are expected to bolster Boyd’s competitive edge amidst rising competition within the locals segment.
Benefits from FanDuel Partnership
Staszak also drew attention to Boyd’s strategic relationship with FanDuel, a subsidiary of Flutter Entertainment (NYSE: FLUT). Boyd owns 5% of FanDuel, a stake that has grown in value alongside the sportsbook operator’s rise as a leader in the online gambling sector in the United States. Over the seven years of their collaboration, this partnership has proven beneficial for both parties, with Boyd leveraging its own sports betting platform in Nevada, where FanDuel is not operational, and maintaining a marketing relationship in other states where FanDuel operates.
As of this week, Boyd Gaming has demonstrated a year-to-date gain of 17.81%, establishing itself as one of the best-performing gaming stocks of 2024. The combination of the upgraded stock rating, strong growth prospects, and fruitful partnerships positions Boyd Gaming favorably within the evolving landscape of the gaming industry.
As analysts and investors watch closely, Boyd Gaming appears well-poised for continued success and expansion both in Las Vegas and across regional markets.