Boyd Gaming, Monarch Casino Downgraded on Regional Gaming Concerns
Boyd Gaming (NYSE: BYD) and Monarch Casino & Resort (NASDAQ: MCRI) were downgraded amid concerns that regional casinos are cladding consumer-related lethargy.
In a take down to clients, Stifel psychoanalyst Steven Wieczynski lowered his ratings on both stocks to “hold” from “buy” piece adding the “regional gaming rudimentary outlook appears uninspiring if not concerning.” His price targets on Boyd and Monarch are $69 and $70, respectively. Shares of Boyd closed in(p) at $62.28 on Friday spell Monarch settled at $65.12.
Regarding Boyd, which is the dominant operator in downtown Las Vegas and single of the biggest names among other Las Vegas locals’ casinos, Wieczynski noted revenue growing could turn relax due to concerning visitation trends in some regional markets.
Based on trends to-date, we believe softness inward disbursal will remain to the highest degree impactful for depress income players inwards certain markets within the South & middle west — both regions where BYD has meaningful exposure,” observed the analyst.
Wieczynski acknowledged that Boyd has tailwinds, including vibrancy in the Las Vegas locals segment, a strong direction team, a tough equilibrium sheet, and check o'er the volume of its existent estate.
Waiting on Deals with Monarch Casino
As measured past keep down of properties owned, Monarch Casino & Resort is the smallest US-listed gambling casino stock. The manipulator runs Atlantis inwards Reno, Nev., and its namesake locus inward the fast-growing Black person Hawk, Colo. market.
In Reno, Monarch has been dealing with elevated promotional activity by rivals over the yesteryear several quarters, a scenario Wieczynski doesn’t look will wane anytime soon because player behavior is changing for the worse.
As for mergers and acquisitions, Monarch is often component part of gaming industry conjecture on that front, likely the termination of its diminutive roster. However, it could be a spell before the fellowship officially announces a purchase.
“Longer term, we trust the constructive thesis here factors MCRI acquiring the next ‘Black Hawk style’ opportunity — videlicet an under-invested asset in a calibre market (stable supply; sensible tax rate; strong population/job maturation trends),” noted Wieczynski. “However, few assets go management’s lofty standards, and hence we cerebrate it could have some time for such a business deal to emerge.”
Churchill Downs Top Regional Casino Idea
It’s not a finish lave regarding the regional casino outlook for 2024, as Stifel is bullish on Churchill Downs (NASDAQ: CHDN), naming that inventory its pinch thought inward the regional gaming space. The research strong maintained a “buy” rating on the inventory spell boosting its cost place to $150 from $145. That implies upside of nearly 18% from Friday’s close.
Churchill Downs owns all of the tangible demesne on which its gaming venues reside, enjoys favourable regulatory benefits in KY and Virginia, and is reducing leverage.
“Putting it all together, we escort CHDN as unambiguously positioned amidst potentially muted regional operator fundamentals granted a line of high-pitched take back on investiture new casino projects, same-store growing tailwinds inwards paint historical Equus caballus racing markets, a favourable outlook for the high-quality Bluegrass State Derby asset, congener resilience to perimeter pressures, rapidly improving balance mainsheet strength & total tangible landed estate ownership, and a top-tier direction team up boasting a disciplined runway track record of capital letter allocation,” concluded Wieczynski.
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