IBD Stock Analysis
- Has a 67.50 cup-with-handle buy point after Friday’s close
- Earnings are rebounding from pandemic shutdowns
- Domestic-focused gaming firms are thriving
Industry Group Ranking
Cup with Handle
* Not real-time data. All data shown was captured at
1:27PM EDT on
Founded in 1975, Las Vegas-based Boyd Gaming operates 28 gaming and entertainment properties in 10 states. Its portfolio includes hotels, casinos, breweries, resorts and spas.
Additionally, the company is a strategic partner and 5% equity owner of FanDuel, the nation’s leading sports-betting and iGaming operator. The partnership includes retail sportsbooks at seven Boyd properties and mobile sports betting apps in Pennsylvania, Indiana, Illinois, Iowa and Mississippi. Boyd executives are optimistic about entering the Louisiana market by the end of the year.
“Our relationship with FanDuel continues to generate value for our shareholders both through our revenue-sharing arrangements as well as the significant value of our 5% equity stake in FanDuel Group,” CEO Keith Smith told investors during the Q2 earnings call. “Based on our strong performance so far this year, we remain firmly on track to generate more than $20 million in EBITDAR from sports betting and interactive gaming this year.”
Meanwhile, as pandemic restrictions disappear and travel resumes with consumers returning to entertainment venues and restaurants, Boyd properties will also continue to benefit.
Boyd Gaming posted blockbuster second-quarter earnings, as pandemic restrictions eased and casino foot traffic returned. It posted EPS of $1.54, bouncing back from a 98-cent loss in the year-ago quarter. Sales exploded 326% to $893.6 million.
However, the bulk of Boyd’s revenue comes from casino operations, which accounted for $727.5 million in sales in Q2.
Boyd will report third-quarter earnings on Oct. 26. FactSet analysts expect EPS to swell 221% to $1.22 on a 28% rise in sales to $837 million.
Shares dipped 0.65% to 64.20 on the stock market today. But BYD stock has soared 50% since the start of the year. BYD stock is in a cup base with a 71.10 buy point, according to MarketSmith chart analysis. After Friday’s close, it’ll have a handle, offering a lower 67.50 entry.
Its relative strength line is rising and approaching recent highs. Boyd’s RS Rating is a solid 89 out of a possible 99. However, its 65 EPS Rating is below the 80 IBD recommends, as the gaming company continues to work its way back to sustained profitability.
Wall Street is bullish about Boyd stock. Eight out of 10 analysts polled by FactSet have a Buy rating. The average target price is $82.40.
Among its rival gaming stocks, Golden Entertainment edged up 0.25% and Century Casinos (CNTY) fell 1%. Scientific Games fell 3.3%.
Boyd Casino Expansion
Meanwhile, Boyd Gaming continues to expand its traditional operations too. Its Sky River Casino project with the Wilton Rancheria Tribe near Sacramento is progressing.
“Steel is in the ground at the Sky River Casino site,” CEO Smith said in the July 27 earnings call. “We are on time and on budget with the construction of this resort, which will include 2,000 slot machines, 80 table games and 12 food and beverage offerings.”
Smith said the casino is slated to open early in the fourth quarter of next year.
Another area of focus for Boyd is implementation of new technology to improve the customer experience. BoydPay, its cashless digital wallet, is now active at five properties and should be live at 21 properties by year end.
“The customer response to BoydPay has been encouraging with our core customers recognizing convenience of a cashless gaming experience,” Smith said. “As a result, we believe that BoydPay will be another key enhancement to our ongoing focus on building stronger relationships with our guests.”
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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