Jefferies Upgrades Boyd Gaming: Positive Outlook Fueled by Strategic Investments and Digital Growth

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Jefferies Financial Group has delivered a bullish outlook on Boyd Gaming (BYD) by upgrading its stock rating from “Hold” to “Buy” and revising its price target from $73 to $92.

This upgrade comes with an optimistic view on Boyd’s future prospects, highlighting key factors that are expected to drive growth in the upcoming years.

Capital Investments Drive Long-Term Growth

One of the main reasons behind Jefferies’ positive stance is Boyd Gaming’s ongoing capital investments, particularly in its regional portfolio.

These strategic investments are seen as pivotal in supporting long-term growth, positioning the company to benefit from the expanding demand in regional gaming markets.

Boyd has been focusing on enhancing its existing properties and upgrading its infrastructure, aiming to solidify its position in the competitive gaming landscape. These efforts are expected to not only drive revenue but also improve operational efficiency, positioning Boyd Gaming for sustained success in the years ahead.

Easing Competitive Pressures in Las Vegas

Jefferies analysts also pointed out that Boyd Gaming stands to benefit from easing competitive pressures in Las Vegas, one of its core markets.

With the reduction of competition from newer entrants, Boyd Gaming is poised to capture a larger share of the gaming and hospitality market in this iconic destination.

The Las Vegas market has long been a challenging one for operators, but with a more favorable environment, Boyd is expected to gain traction. This, combined with the company’s ongoing investments, makes Boyd Gaming an attractive prospect for investors looking for stability and growth.

Share Repurchases and Earnings Growth

Boyd Gaming’s commitment to shareholder value is evident through its share repurchase program, which Jefferies believes will contribute to a year-over-year earnings per share (EPS) growth of approximately 9%.

Share buybacks are a popular strategy among companies to boost shareholder returns by reducing the number of outstanding shares, thus increasing EPS.

This focus on shareholder value, coupled with a strong commitment to growth, positions Boyd Gaming as a solid investment choice for long-term investors.

Undervalued Digital Presence with FanDuel Partnership

Jefferies also sees significant value in Boyd Gaming’s digital presence, particularly its partnership with FanDuel. According to their analysis, Boyd’s online sports betting and casino business through FanDuel is undervalued by the market, with a valuation of $7 per share attributed to this segment alone.

This partnership with FanDuel positions Boyd as a leader in the fast-growing online gaming and sports betting industry. As more states in the U.S. legalize sports betting, Boyd Gaming stands to capture a larger share of this lucrative market, further enhancing its growth potential.

Looking Ahead: A Promising Future for Boyd Gaming

With a new “Buy” rating and an increased price target of $92, Jefferies analysts are confident that Boyd Gaming’s combination of capital investments, easing competition, robust shareholder initiatives, and strong digital growth will lead to impressive performance in the coming years.

As Boyd Gaming continues to execute its growth strategies and capitalize on favorable market conditions, it is well-positioned to deliver strong returns for its shareholders in 2025 and beyond.

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