Boyd Inventory Hits New Excessive as Las Vegas, Norfolk Underpin Development
Shares of Boyd Gaming (NYSE: BYD) rallied Friday, a day after the on line casino operator delivered third-quarter outcomes — a report that highlighted development alternatives in Las Vegas and Norfolk, Va.
Boyd Gaming’s Fremont Resort and On line casino in downtown Las Vegas. The inventory hit a brand new 52-week excessive immediately as buyers embraced the corporate’s development plans. (Picture: Vegas Means Enterprise)
The inventory closed increased by 7.85% on quantity that was almost triple the every day common, ascending to a contemporary 52-week excessive, after the operator waxed bullish on its plans for the Cadence Crossing On line casino in suburban Las Vegas and a partnership with a Native American tribe to run a brand new gaming venue in Norfolk. Analysts took observe with Stifel analyst Steven Wieczynski elevating his value goal on Boyd inventory to $74 from $67.
BYD is slowly beginning to stand proud of their peer group given continued wholesome/steady traits of their core Las Vegas locals market coupled now with a decent-sized long-term development venture (Norfolk, Va.) that may come on-line in phases beginning subsequent 12 months,” noticed the analyst.
He mentioned that with the assistance of the aforementioned initiatives and “a pristine steadiness sheet” relative to rivals, beforehand dour sentiment on the inventory might begin turning for the higher.
New Casinos Assist Case for Boyd Inventory
In its residence market of Las Vegas, Boyd tussles with Pink Rock Resorts (NASDAQ: RRR) to command the majority of play from locals and with that rival planning enhancements within the Valley, Boyd wants to reply.
A few of that response contains Cadence Crossing, which can exchange Jokers Wild On line casino in Henderson — a property affected by the coronavirus pandemic. Boyd initially deliberate to rebuild the venue utilizing the Jokers Wild identify, but it surely’s taking the Cadence Crossing identify to replicate ties to a brand new close by master-planned neighborhood.
In Virginia, Boyd will work with the Pamunkey Indian Tribe, which not too long ago gained voter approval to construct a brand new gaming venue alongside the Elizabeth River. Wieczynski mentioned that venture is enticing on a number of ranges, together with the purpose that it diminishes the probability of Boyd searching for established on line casino property.
“Shifting onto the Norfolk venture, we expect the on line casino growth represents a compelling alternative for confirmed gaming operators to enter an underserved, high-quality market with out having to pursue/execute large-scale M&A,” added the Stifel analyst. “We additionally suppose this $750M venture decreases the probability that BYD will exit and purchase a portfolio of land-based property, which fact be instructed, makes us breathe a sigh of reduction.”
Different Boyd Las Vegas Casinos Might Assist, Too
In the course of the third quarter, Boyd’s downtown Las Vegas phase, the place it’s the most important operator, carried out effectively, however the Orleans and the Gold Coast have been hindered by what the corporate described as “aggressive pressures.”
These headwinds might be within the type of smaller impartial operators boosting promotional exercise at casinos that compete with Gold Coast and the Orleans in addition to Pink Rock’s Durango doubtlessly pilfering some enterprise from these venues in addition to the Suncoast.
Boyd not too long ago opened a brand new high-tech sportsbook at Suncoast and Wieczynski believes the chance is there for the operator to rejuvenate total exercise at that on line casino resort.
“Nonetheless, trying into 2025, we imagine the setup for BYD might grow to be extraordinarily compelling relative to the broader regional gaming panorama,” concluded the analyst. “If the corporate can execute an identical playbook at Suncoast as they carried out on the Fremont, we imagine the Las Vegas locals phase might be poised to not solely normalize however ship development regardless of oppressive promotional situations.”
