Credit Suisse: Buy Boyd Gaming, It's Worth $18/Share

In a report published Monday, Credit Suisse analyst Joel Simkins upgraded the rating on

from Neutral to Outperform, while raising the target price from $17 to $18, after meetings with company officials. Boyd Gaming is expected to benefit from a "resolution to the GLPI/PNK saga," increased stability in its core markets and reduced leverage from good FCF generation, analyst Joel Simkins stated. "Relative to when we downgraded to Neutral, we believe the LV locals market is gradually improving, cannibalization in most regional markets has subsided, Borgata is gobbling up share in Atlantic City, and that the guidance articulated for 2015 (EBITDA of $542m-$567m) is readily attainable," Simkins added. Boyd is also expected to benefit from the rising employment levels in and around Las Vegas and the improving economic activity levels. "With the Locals and Downtown businesses accounting for 21% of 2015 EBITDA in aggregate, BYD should benefit from improved consumer discretionary spending at its assets as well as room rate growth in town," Simkins wrote. Boyd's consistent efforts to improve its balance sheet by disposing non-core assets, refinancing its debt and pushing out maturities are expected to result in greater financial flexibility and thus position the company better to face the bumps in business.