Analyst raises Boyd Gaming price target

Stifel has increased its price target despite lowering estimates for near-term performance.

US.- The financial analyst Steven Wieczynski at Stifel has increased his price target for Las Vegas gaming giant Boyd Gaming while lowering near-term estimates due to the effects of the Covid-19 pandemic.

The analyst reemphasised a buy rating on Boyd’s shares and increased his price target from $54 to $60.

However, he lowered near-term estimated for Boyd, which recently announced the sale of its Eldorado Casino Henderson, saying that the operator could face a challenging year.

He said: “We are lowering our near-term estimates to account for softer visitation patterns witnessed in 4Q20, and, so far, in 1Q21, given heightened COVID restrictions that have been implemented across many of BYD’s operating markets.

“We believe until virus cases start to plateau and the vaccination progress accelerates, many states will continue to restrict social gathering venues (including casinos).”

As a consequence of the Covid-19 pandemic, gaming properties across the US are operating with reduced capacity limits among other sanitary measures.

Boyd reported 2020 third-quarter results showing a 20.4 per cent decline in group revenue year-on-year.

The company owns 29 properties in 10 states, many of which made layoffs as a result of the impact of the pandemic.

But Wieczynski said he remained optimistic on Boyd’s long-term future.

He said: “We continue to believe spending/visitation trends will remain relatively healthy (once the country goes back to normal) across the majority of BYD’s operating markets, while their diminishing cost structure should ultimately allow for greater flow through.

“We believe a lot of the cost saves that have been achieved during COVID-19 should prove permanent, even as certain revenues come back online.”