Why Investors Should Retain Boyd Gaming (BYD) Stock Now
Boyd Gaming Corporation's BYD shares have gained 11% this year compared with the industry’s increase of 26.4%. The underperformance can be primarily attributed to higher wages, utilities and property insurance expenses.
In third-quarter 2023, total operating costs and expenses increased to $685.3 million compared with $639.8 million reported in the prior-year quarter. Going forward, the company intends to monitor the economic situation to gauge the impacts of interest rate hikes and inflationary pressures.
However, in the last month, this Zacks Rank #3 (Hold) company’s stock has gained 4.2% compared with the industry’s increase of 1.4%. It is benefiting from robust sports betting, portfolio expansion and growth in the Online segment’s EBITDAR. Let’s delve deeper and find out factors why investors should hold on to the stock.
Factors Likely to Drive Growth
Boyd Gaming has been undertaking efforts to expand online betting offerings. In the third quarter, the Online segment generated $90.3 million in revenues, up 72.5% year over year. The uptrend was backed by the solid performance of Panda in Ohio and Pennsylvania and the addition of the Boyd Interactive platform.
During the third quarter of 2023, EBITDAR in the Online segment came in at approximately $11 million, reflecting 73.3% growth on a year-over-year basis. For 2023, the company expects segmental EBITDAR in the range of $60-$65 million, indicating an uptick from the prior expectation of $55-60 million.
Management projects solid contributions from FanDuel operations (in Ohio and Kansas) and Boyd Interactive's portfolio. During the second quarter of 2023, it relaunched Starts branded online casinos in Pennsylvania and New Jersey, marking the first leveraging of the Boyd Interactive platform to manage its online casino operations.
The company continues to focus on expanding its portfolio. It has expanded its presence in Northern California. Moreover, it is evaluating opportunities to reinvest in its existing operations from its regional portfolio. To this end, it has started to develop a land-based facility at Treasure Chest. The company remains on track to complete the expansion project by spring 2024. It emphasized enhancing its gaming and non-gaming offerings to boost the guest experience of this property.
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Key Picks
Some better-ranked stocks in the Zacks Consumer Discretionary sector are:
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The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates a rise of 57.7% and 187.9%, respectively, from the year-ago period’s levels.
Live Nation Entertainment, Inc. LYV sports a Zacks Rank #1 at present. The company has a trailing four-quarter earnings surprise of 37.5% on average. Shares of LYV have gained 36% in the past year.
The Zacks Consensus Estimate for LYV’s 2023 sales and EPS indicates a rise of 29.5% and 132.8%, respectively, from the year-ago period’s levels.
JAKKS Pacific, Inc. JAKK currently sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 61.8% on average. Shares of JAKK have gained 121.4% in the past year.
The Zacks Consensus Estimate for JAKK’s 2024 sales indicates a rise of 3.6% from the year-ago period’s levels.
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Boyd Gaming Corporation (BYD) : Free Stock Analysis Report
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