Boyd Gaming’s Efforts Bode Well, Coronavirus Woes to Linger

Boyd Gaming Corporation BYD is likely to benefit from portfolio expansion and increased focus on online betting. However, the coronavirus pandemic and high costs woes linger. Let’s delve deeper.

Factors Likely to Drive Growth

Boyd Gaming continues to expand its portfolio by strengthening current operations and growing through capital investment as well as other strategic measures. The company extensively depends on acquisitions as a strategy to expand its brand presence. Earlier, it entered into an agreement with Penn National Gaming to acquire the operations of Ameristar St. Charles; Ameristar Kansas City; Belterra Casino Resort in Florence, IN; and Belterra Park in Cincinnati, OH.

Meanwhile, Boyd Gaming has also been making efforts to expand its online betting offerings. One of the notable initiatives by the company has been the legalization of sports . During third-quarter 2019, the company partnered with FanDuel Group and opened sports books at Blue Chip, Belterra Resort, Diamond Jo Dubuque and Diamond Jo Worth properties in the Midwest. It also introduced a market-leading mobile app in Pennsylvania. Moreover, courtesy of its performance in Pennsylvania and New Jersey, FanDuel launched its mobile betting app in the state of Indiana.

Following the closure of properties in mid-March due to the COVID-19 outbreak, Boyd Gaming recently announced that it will reopen seven properties across Louisiana and Mississippi. The company stated that these will be the first Boyd Gaming properties to reopen amid the pandemic.

Concerns

Boyd Gaming’s financials in 2020 are likely to be adversely impacted by the outbreak of coronavirus. Since the severity and duration of the outbreak’s impact on its business cannot be estimated at present, the company has not only suspended its share repurchase programs but has also withdrawn its 2020 guidance.

Despite having several margin-improvement initiatives in place, Boyd Gaming is grappling with escalating expenses across gaming, food and beverage, room, and other offerings. Costs in the coming quarters are likely to shoot up due to the coronavirus-induced shutdowns. In the past three months, the company’s shares have declined 37.2% compared with the industry’s decrease of 25.6%.

 

Boyd Gaming — which shares space with Century Casinos, Inc. CNTY , Eldorado Resorts, Inc. ERI and Las Vegas Sands Corp. LVS in the Zacks Gaming industry — carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1(Strong Buy) Rank stocks here.

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Las Vegas Sands Corp. (LVS) : Free Stock Analysis Report
 
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