UPDATE: Goldman Sachs Downgrades Boyd Gaming Corporation to Sell on Weak Sector, High Expectations

Goldman Sachs downgraded Boyd Gaming Corporation

from Neutral to Sell and announced a $5.50 price target. Goldman Sachs noted, "We downgrade Boyd Gaming (BYD) from Neutral to Sell with 26% downside to our $5.50 12-month price target (vs. 2% downside for our Gaming coverage). Boyd shares trade at 7.5X 2013E EBITDA, which is a slight discount to the longterm historical average of 8.0X, on what is a more challenged business now than it was in the past. Boyd shares have rallied roughly 8% over the last three days, likely on the expectation of legalized online gambling in New Jersey. While we think online gambling could ultimately be big, we expect it could take longer than expected to roll out and will be very competitive, with high promotional activity, which in turn could lead to lower-than-expected margins." Boyd Gaming Corporation closed at $7.48 on Monday.