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Boyd Gaming (BYD) Strategic Plans Bode Well for the Stock

Zacks Equity Research
Boyd Gaming's (BYD) consistent focus on expansion strategy to drive growth in the long run is impressive.

Boyd Gaming Corporation BYD continues to expand its portfolio by strengthening current operations and growing through capital investment as well as other strategic measures. These efforts have helped the company to register top-line and EBITDA growth over the past few quarters.

Key Catalysts

Despite the fact that demand in the Gaming space is relatively inelastic and a fixed range of consumers will continue to seek such services irrespective of market conditions, there are reasons to believe that the Boyd Gaming might see consistent growth over the long haul.

Additionally, the company’s consistent focus on expansion strategy to drive growth in the long run is impressive. Earlier, Boyd Gaming announced that it has 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. Also, it entered in to definitive agreement with Valley Forge Convention Center Partners, L.P. to acquire Valley Forge Casino Resort in King of Prussia, PA. Per Boyd Gaming, the company will acquire four Pinnacle properties as well. In the coming months, Boyd Gaming expects to add these five properties to its portfolio.

Meanwhile, Boyd Gaming, which shares space with Caesars Entertainment Corporation CZR, Eldorado Resorts, Inc. ERI and MGM Resorts International MGM, has been generating EBITDA growth for quite some time. In second-quarter 2018, the company reported EBITDA growth for the 13th quarter out of the last 15 quarters. Its Las Vegas operations achieved 13th successive quarter of EBITDA growth.

For 2018, Boyd Gaming raised its adjusted EBITDA guidance. The company now expects the metric to be in the range of $618-$633 million compared with $600-$620 million projected earlier. Furthermore, it has been reporting solid operating margin expansion for the past several quarters.

The company’s revenues, which witnessed growth of 9.1% in 2017, are likely to continue its robust performance in 2018 and 2019. Also, Boyd Gaming’s bottom line returned to growth, after witnessing a sharp decline of 42.1% in fourth-quarter 2017. In the first and second quarter of 2018, earnings have increased 21.9% and 46.2%, respectively.

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