Janney: Time To Buy Boyd Gaming Ahead Of Las Vegas And Atlantic City Strength

Janney’s Brian McGill upgraded the rating for Boyd Gaming Corporation (NYSE: BOYD) from Neutral to Buy, while raising the fair value from $21 to $25. The analyst believes that the company is poised to benefit from strong gaming growth trends in its regional business, the Las Vegas locals market and at the Borgata in Atlantic City.

Improved Gaming Trends To Boost Results

Strong gaming trends in 1Q16 are likely to help the company generate better-than-expected results. The company’s full year EBITDA guidance [including Borgata] appears conservative, analyst Brian McGill said.

Better-than-expected growth in Boyd Gaming’s Las Vegas locals segment in recent months is likely to continue. McGill expects the company to benefit from recent capex investment on the non-gaming side.

The AC market, including the Borgata, have benefited from the closures of casinos. Although these casinos may reopen, it could take at least five years for this to happen, McGrill commented.

“At the same time, there is the outside chance that sports betting is legalized by this summer. This represents a catalyst that is not priced in at all,” the analyst wrote. He added that the possibility of Boyd Gaming monetizing certain properties is also not priced into the stock.