Market Overview

BofA Bets On Boyd Gaming's Growth, Potential

BofA Bets On Boyd Gaming's Growth, Potential

Boyd Gaming Corporation (NYSE: BYD) announced Dec. 18 that it agreed to pay Penn National Gaming (NASDAQ: PENN) $575 million for its Ameristar St. Charles and Kansas City operations in Missouri and Indiana's Belterra Casino Resort and the Belterra Park property in Cincinnati.

The Analyst

Bank Of America Merrill Lynch's Shaun Kelley upgraded Boyd Gaming from Neutral to Buy and increased the price target from $36 to $42.

The Thesis

The analyst said he sees room for continued re-rating of Boyd Gaming Corp. driven by top-line growth that holds acceleration and recovery potential. (See Kelley's track record here.) 

Boyd has potential for margin improvement driven by promotional discipline and rationalization, as well as late-cycle multiple expansion potential, Kelley said. 

The company could have $50 million to $120 million of revenue and cost opportunity in its casino portfolio over the next couple of years, the BofA analyst said. Boyd's revenue upside could come from better growth in a low-supply, improving macro environment; acquisition synergies and recovery in Boyd's core Las Vegas locals portfolio.

Kelley expects that the $575-million acquisition of four properties from Pinnacle and the $281-million acquisition of Valley Forge casino could take Boyd Gaming to almost $900 million in EBITDAR and up to $4 per share of free cash flow, which means that the stock could reach the $42 price target if it its multiple holds.

The Price Action

Boyd Gaming jumped almost 5 percent Friday and has gained around 76 percent year-to-date. 

Related Links: 

Vegas Gaming Slumps In November, Strip Continues To See Impact From Shooting

Las Vegas Vs. Macau, By The Numbers 

Latest Ratings for BYD

Oct 2020Morgan StanleyMaintainsOverweight
Oct 2020National Bank FinancialDowngradesOutperformSector Perform
Oct 2020Morgan StanleyMaintainsOverweight

View More Analyst Ratings for BYD
View the Latest Analyst Ratings


Related Articles (BYD)

View Comments and Join the Discussion!

Posted-In: Bank of America Merrill Lynch casinos gambling gamingAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga

Latest Ratings

AYLANoble Capital MarketsInitiates Coverage On29.0
SHOPSusquehannaInitiates Coverage On950.0
SICraig-HallumInitiates Coverage On50.0
WORKStephens & Co.Downgrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at