Boyd Gaming (NYSE: BYD) delivered third-quarter results Wednesday afternoon, licking top and bottom-line estimates for the ninth sequential quarter.
In this calamitous market place environment, Boyd being “boring,” as an analyst describes it, is actually a positive, as marketplace participants look for for clarity and dependability inwards the downtrodden gambling casino equity space. Following the bullish every quarter update, Boyd shares are trading higher Midweek patch garnering living from Wall Street analysts.
In a line to clients, Stifel analyst Steven Wieczynski reiterated a “buy” rating on Boyd with a $78 toll target, implying upside of nearly 42% from the October 25 close.
Boring could and should follow viewed as a sound thing in this stream unsure macro instruction environment,” wrote Wieczynski. “While some investors testament likely oscitance at BYD’s uniform operating results and require how practically more is there to come, we would 100% disaccord and welcome these kinds of calm results.”
The analyst lauded the siege of Orleans manipulator sporting intelligent operating margins and robust free hard currency flow-generating capabilities, which he noted are beingness funneled to investors inwards the make of buybacks and dividends.
Boyd Boring and Potentially Beneficial
Boyd runs 28 gaming venues across 10 states, including 11 inwards its rest home city, and it’s the dominant manipulator in downtown Las Vegas.
While the company has a significant Sin City presence, it doesn’t operate on the Strip. Rather, it emphasizes downtown and the Las Vegas locals segment. Its other venues are inward regional markets. As highlighted past the third-quarter results, Boyd’s trends are sturdy, indicating customers aren’t in time scaling backwards on visits to the operator’s venues due to inflation and rising involvement rates.
“While we aren’t trusted when/if the consumer testament go to crack, based on the current macro instruction backcloth and the potentiality for some kind of consumer-led ceding back to nurture its head sometime soon, we believe remaining conservative with our forwards intellection is most prudent at this point,” added Wieczynski. “While BYD noted that their magnetic core customer trends have got not weakened at all through October, we believe investors will in all likelihood uphold to clash sour that commentary and instead focus on ‘what’s to come in over the next couple up of months.’”
Boyd’s substantial Silver State step is potentially more attractive inward times same these. That’s because the mass of its venues inward the Las Vegas surface area aren’t intemperately dependent on tourists, but kind of on locals who aren’t worried virtually in high spirits airfare and gaseous state prices.
Boyd Risk/Reward Appealing
Shares of Boyd are down pat(p) 16.46% year-to-date. But the gaming company’s aforementioned power to generate disengage cash flow could live a signal the gillyflower is deeply undervalued.
Wieczynski said the gunstock should swop around a free people hard currency stream knuckle under of 7% to 8%, implying a portion out toll of $73 to $81 and that’s with factoring inward a possible recession.
“With BYD shares showing an ~11% FCF yield, we trust it’s a matter of clip before investors grab on and interpret shares remain undervalued when compared to peers,” concluded the analyst. “You hold a companion that has a massively underlevered counterbalance sheet, warm core group fundamentals, tangible demesne optionality and a telephone call alternative around sports betting, yet trades at a price reduction to sure peers.”