iGaming Industry’s Compelling & Unappreciated Growth Prospects Help Boyd Gaming Win Analyst Attention

• Credit Suisse analyst Benjamin Chaiken initiated coverage on Boyd Gaming Corp (NYSE: BYD) with an Outperform rating and a price target of $82.

• The re-rating reflected the iGaming industry’s robust and unappreciated growth, driving upside to estimates and compelling valuation.

• The analyst thinks the Downtown market could inflect higher as corporate demand on the Strip returns, driving spillover into adjacent markets like Downtown Las Vegas.

• In addition to Downtown market-wide growth, BYD is investing $50 million in its Freemont property, which should drive a healthy ROI.

• BYD is spending $100 million to move its Treasure Chest casino from a riverboat to a newly developed land-based asset adjacent to the existing property. The analyst thinks new amenities, better access, and a more cohesive casino floor could drive a 20-30% ROI, with the Pala Interactive acquisition should be a slight tailwind in ’23.

• In mid-’23, BYD will move its Stardust B2C iGaming product from FanDuel onto the newly acquired Pala Interactive, thus capturing 100% of the economics, serving as an incremental tailwind.

• BYD’s Tribal management contract for the Sky River Casino will likely drive incremental management fees.

• Price Action: BYD shares traded higher by 1.40% at $59.24 on the last check Tuesday.

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