UPDATE: Morgan Stanley Raises PT on Boyd Gaming on Upside Driven by Online Gaming

In a report published Wednesday, Morgan Stanley analyst Thomas Allen reiterated an Overweight rating on Boyd Gaming Corporation (NYSE: BYD), and raised the price target from $16.00 to $17.00.

In the report, Morgan Stanley noted, “We view BYD as the best positioned in our US coverage to benefit from the legalization of US online gaming. Expect BYD stock price (near-term) and earnings (medium/longer-term) to appreciate from current levels. Online has potential to shift US gaming (or BYD's EBITDA at least) from no/low to high growth. Boyd is only trading at ~7.4x our ‘14e EBITDA, close to its historical avg & in line with regional peers. Given 6x leverage, we see significant upside from incremental EBITDA. While we expect regional gaming revenue to continue to be choppy NT, improving macro appears to at least help things not turn materially worse. In addition, cost controls and less competition in the LV Locals market should lead it to outperform”

Boyd Gaming Corporation closed on Tuesday at $13.76.