Boyd Margin Story Impresses, Analyst Says M&A, Dividend Resumption Possible

Boyd Gaming (NYSE:BYD) reported better-than-expected first-quarter results on Tuesday. But the existent story is on-going border expansion and signs that Mar traffic impulse is carrying o'er to April.

That could be a subscribe the siege of Orleans operator testament drive home another circular of telling data for the stream quarter, and some analysts are forecasting more upside for Boyd stock. Macquarie’s Chadic language Beynon rates the regional gaming manipulator “neutral,” but he boosted his price aim on the public figure to $77 from $62. That implies upside of 11.5 percent from the April 27 close, and is good above the consensus forecast of around $60.

Boyd’s 100 percent regional pose continues to escort security deposit tailwinds due to structural changes brought on by COVID-19,” said Beynon in a line to clients.

“First-quarter margins expanded 1,200 cornerstone points over 1Q19. Apr results have carried o'er from March, and hotel reservations are at the highest levels inward the utmost year.”

Las Vegas-based Boyd operates 28 gaming venues crosswise 10 states, including 11 inwards its rest home market. In Sin City, Boyd is the largest manipulator downtown, and derives a substantial chunk of its revenue from the resurgent Las Vegas locals (LVLs) segment.

Sources of Strength for Boyd Stock

Mounting signs that Las Vegas locals are getting coronavirus vaccines and eager to proceeds to their favourite casinos, joined with Boyd’s enviable rest inwards serving that demographic, is a catalyst for the shares. But there’s more to the story.

In the firstly quarter, LVLs and Boyd’s downtown venues combined for 35 percent of earnings before interest, taxes, depreciation, amortization, and restructuring or lease costs (EBITDAR). The remainder derived from the operator’s casinos in the midwestern United States and the South. LVL margins were the topper of the triad segments, but revenue at midwestern and southern venues topped what was notched inward the comparable stop inward 2019.

Margin expanding upon and revenue growth in the LVL demographic and regions out of doors NV tin can reinforcement Boyd stock, as downtown Las Vegas remains sluggish. Macquarie’s Beynon notes the operator’s marketplace share in that constituent of the city is currently 10 percent, compared to a pre-pandemic clip of 25 percent.

He expects Boyd’s downtown earnings before interest, taxes, depreciation and amortisation (EBITDA) will playground slide 49 percent this yr compared to 2019, before rising six percent inwards 2022.

Looming Online Catalysts

While Boyd isn’t the public figure many investors believe of when it comes to online sports betting, the companionship has levers inwards that arena via its five percent ownership of FanDuel – a trait some analysts trust isn’t accurately reflected in Boyd stock.

From an online standpoint, Boyd’s FanDuel partnership and proprietary iGaming launch (this quarter) should guide to positively charged Earnings Before Interest Taxes Depreciation and Amortization of $20 one thousand thousand in 2021,” said Beyon.

The psychoanalyst values the operators magnetic core land-based gambling casino business organization at $59 a share, and online casinos and sports betting at $17.

He adds that as leverage decreases, Boyd could resume its dividend, which was suspended endure twelvemonth because of the pandemic, or seek out “accretive” merger and acquisition opportunities later this year.

This news is curated to you by the NTC33 Malaysia.