Boyd Gaming Corp up 46 percent year-to-date. One of 2019’s best-performing casino and leisure stocks is (NYSE:BYD). Some analysts believe that in 2020, more upside is coming for the operator of The Orleans and Sam’s Town in Las Vegas.
Nomura Instinet analyst Harry Curtis, in a recent note on Boyd, highlighted the company’s new projects in Sin City, where it runs a dozen gaming properties, while predicting positive earnings before interest, taxes, depreciation and amortization (EBITDA) growth.
Curtis said, “We believe M&A-driven revenue and cost synergies will continue to help drive earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR)outperformance.”
Apart from the above-mentioned Orleans and Sam’s Town, Boyd Gaming runs the Aliante, Eastside Cannery, California, Cannery, Fremont and Suncoast Hotel and Casino in and around its home market of Las Vegas.
Wall Street Is Keen
As reported by casino.org, analysts and investors seem to have regained interest on Boyd stock partly due to the company’s sports betting exposure, which is boosted by a partnership with FanDuel. In 2018, that deal was announced, a few months after the Supreme Court verdict on the Professional and Amateur Sports Protection Act (PAPSA).
When it comes to brick-and-mortar sportsbooks, the Boyd/FanDuel association doesn’t just help the casino operator. It allows the gaming operator access to FanDuel’s huge database of daily fantasy players.
Still, investors have been half-hearted on betting on gaming equities with sports wagering leverage, including Boyd. Since the PAPSA verdict, the Main Street Station operator and rival Penn National Gaming (NASDAQ:PENN), another regional operator with considerable sports betting exposure, have seen their shares fall, though both have rallied in 2019.
In recent note, Morgan Stanley analyst Thomas Allen said, “We do not believe investors have been willing to underwrite sports betting yet, but if we enter a new mini cycle, we expect investors will start to pay attention more in 2020.”
Assuming legalization in 36 states, Morgan Stanley sees the domestic sports betting market rising to $7 billion by 2025. 19 states and Washington, D.C. have approved sports wagering currently.
Betting On Boyd
Boyd has more than enough sports betting leverage. Apart from its 12 Silver State venues, the company operates four properties combined in the fast-growing Indiana and Iowa markets.
Also, the operator has a total of three properties in Mississippi and Pennsylvania, states where sports betting is legal and doing well, as well as the Par-A-Dice in Illinois. Next year sports betting is expected to come online in the Prairie State.
For his part, Curtis is confident on Boyd, putting a $37 price target on the name, suggesting upside of nearly 22 percent from Friday’s close at $30.34.