UPDATE: JP Morgan Downgrades Boyd Gaming Group to Underweight
JP Morgan has published a research report on Boyd Gaming Group (NYSE: BYD) and has downgraded the company from Neutral to Underweight.
In the report, JP Morgan writes, "At current levels, BYD trades at 8.0x 2012E EV/EBITDA, a premium to the average of its regional, smaller cap peers (PENN, PNK, ASCA trade on average at 7.0x 2012E EBITDA). With additional competition in the already soft Atlantic City market as the new Revel property opens this spring, we see additional pressure on 2012 Borgata-related EBITDA. Therefore we are lowering our 2012 Borgata EBITDA estimate by 5%. Given (1) this likely pressure in AC (Borgata accounts for ~$3 or >50% of BYD's equity value), (2) a slow recovery in the LV locals market, and (3) a relatively high valuation, we don't see how the shares of BYD can appreciate from here. Our year-end 2012 price target is $5 (no change), representing 30% downside from here."
JP Morgan maintains its $5 price target on Boyd Gaming Group, which is currently trading down $0.35 from yesterday's $7.25 closing price.
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