On Wednesday, Mizuho modestly reduced the price target of Boyd Gaming Corporation (NYSE: NYSE:BYD (SZ:002594)) shares from $78.00 to $77.00, while the stock retained its Outperform rating.
The firm's analyst cited a favorable valuation metric, as Boyd Gaming currently trades at 6.5 times the firm's forecast for the next fiscal year's EBITDA. This valuation is deemed attractive within the expected range of 6-9 times EBITDA.
The analyst's second-quarter EBITDA estimate for Boyd Gaming stands at $357 million, slightly above the consensus of $353 million among other analysts. This forecast is considered achievable, suggesting confidence in the company's near-term financial performance.
Boyd Gaming's market position appears to be strengthening, with trends showing sequential improvement. Additionally, the company may benefit from strategic opportunities, including potential sale-leaseback transactions or mergers and acquisitions activity with peers like Penn National Gaming (NASDAQ:PENN).
Despite concerns about Boyd Gaming's possible share loss in the local market segment, the firm believes that the current EBITDA multiple and what is perceived as a bottomed-out market sentiment provide a balanced risk/reward scenario for investors.
The stock's performance and investment potential are being closely watched, with the firm's valuation analysis suggesting that Boyd Gaming's shares offer a reasonable entry point for investors considering the company's financial outlook and market dynamics.
In other recent news, Boyd Gaming Corporation announced significant developments. The company reported earnings of $116 million, up from $96 million in the same period last year, despite facing a challenging first quarter due to adverse weather conditions and a softer Las Vegas locals market.
Additionally, Boyd Gaming expanded its share repurchase program by an additional $500 million, bringing the total available repurchase authority to approximately $721 million.
The company also appointed Michael A. Hartmeier, a former banking executive with extensive financial experience, to its Board of Directors. Investment firm Raymond James initiated coverage on Boyd Gaming, assigning an Outperform rating due to the company's strong balance sheet and the value of its owned real estate. However, Argus downgraded Boyd Gaming's stock rating from 'Buy' to 'Hold' due to concerns about competition in the Las Vegas Locals segment.
Boyd Gaming's Board of Directors announced a quarterly cash dividend of $0.17 per share. Despite anticipated pressures, Argus projects a moderate revenue increase in 2024, coupled with a modest rise in earnings. The firm also forecasts that Boyd Gaming's operating margin will improve, thanks to favorable operating leverage at its Las Vegas and certain regional properties.
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