Last Update29 Jul 25Fair value Increased 12%
Analysts have raised Boyd Gaming’s price target to $88.85, citing balance sheet strengthening and increased earnings stability from the accretive FanDuel stake sale and revised market access agreements, though some caution on fair valuation and sector-wide macro risks.
Analyst Commentary
- Sale of Boyd’s 5% stake in FanDuel at a strong, highly accretive valuation provides a substantial cash influx, which is expected to be primarily used for debt reduction, resulting in significant annual interest expense savings and further strengthening the balance sheet.
- Revised and extended market access agreements with FanDuel/Flutter will now offer Boyd fixed-fee income per state through 2038, replacing previously variable structures, which introduces stability but removes potential variable upside.
- Bullish analysts see the FanDuel deal as a catalyst for a re-rating of U.S. gaming assets, boosting sector sentiment and implying positive read-through for online peers like DraftKings, while the transaction’s swift execution exceeded expectations.
- Bearish analysts caution that after accounting for the FanDuel stake sale and modeled debt reduction, Boyd’s stock appears fairly valued at current levels, prompting reductions to more neutral stances despite raised price targets.
- Macro risks—including consumer headwinds, tariff uncertainty, and regulatory/tax developments in digital gaming—are flagged as sector-wide challenges; Boyd’s stable core operations and regional focus are seen as relatively advantageous in this environment.
What's in the News
- Boyd Gaming significantly expanded its share repurchase program by authorizing an additional $500 million, bringing the total share buyback authorization to $2.8 billion (Key Developments, 2025-07-17).
- In Q2 2025, the company repurchased 1.47 million shares for $105 million, with total cumulative repurchases reaching 34.38% of shares outstanding since 2021 (Key Developments, 2025-07-24).
- Boyd Gaming was added to both the Russell 1000 Value-Defensive Index and the Russell 1000 Defensive Index, highlighting its perceived stability and value characteristics (Key Developments, 2025-06-28).
- Boyd Gaming signed a new three-year extension with International Game Technology (IGT) for sports betting technology, continuing to use IGT’s PlaySports platform and retail kiosks across its properties in Nevada and several other states (Key Developments, 2025-06-16).
- New Jersey proposed a tax increase of “less than 20%” on online sports betting and iGaming, potentially impacting Boyd Gaming’s online gaming business exposure in the state (NJ.com, 2025-06-24).
Valuation Changes
Summary of Valuation Changes for Boyd Gaming
- The Consensus Analyst Price Target has significantly risen from $80.62 to $88.85.
- The Consensus Revenue Growth forecasts for Boyd Gaming has significantly fallen from 1.4% per annum to -3.8% per annum.
- The Net Profit Margin for Boyd Gaming has significantly risen from 12.84% to 15.36%.
Key Takeaways
- Expansion efforts, including new projects and upgrades, aim to enhance gaming capacity and customer experience, potentially boosting revenue and margins.
- Growth in online gaming and shareholder returns strategies signify a focus on increasing EBITDAR and enhancing stock valuation.
- Competitive pressures, economic uncertainties, and strategic caution in capital allocation could impact Boyd Gaming's revenue stability, earnings, and shareholder returns.
Catalysts
About Boyd Gaming- Operates as a multi-jurisdictional gaming company in the United States and Canada.
- Boyd Gaming's ongoing expansion activities, including the Sky River project and its phases, are expected to enhance gaming capacity and diversify offerings, potentially leading to future revenue growth.
- The company's investment in upgrading existing properties, like the Suncoast renovation and new amenities at various hotels, is anticipated to enhance customer experience and could drive higher revenues and improved net margins.
- The upcoming projects like the Cadence Crossing in Las Vegas and the Norfolk resort in Virginia aim to tap into underserved markets, which could lead to increased revenues and earnings.
- Boyd Gaming's growth in its Online segment, particularly through Boyd Interactive and its stake in FanDuel, is expected to contribute significantly to EBITDAR growth due to the expanding online gaming market.
- Consistent share repurchases and dividend payments illustrate Boyd Gaming's commitment to enhancing shareholder value, which can positively impact earnings per share and support stock valuation.
Boyd Gaming Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- Analysts are assuming Boyd Gaming's revenue will decrease by 4.3% annually over the next 3 years.
- Analysts assume that profit margins will increase from 14.0% today to 15.8% in 3 years time.
- Analysts expect earnings to reach $556.3 million (and earnings per share of $8.39) by about August 2028, down from $564.5 million today. The analysts are largely in agreement about this estimate.
- In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 13.8x on those 2028 earnings, up from 11.8x today. This future PE is lower than the current PE for the US Hospitality industry at 21.6x.
- Analysts expect the number of shares outstanding to decline by 7.0% per year for the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 10.21%, as per the Simply Wall St company report.
Boyd Gaming Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- Competitive pressures impacted revenue and EBITDAR at The Orleans, which could continue affecting overall earnings if not mitigated.
- Economic uncertainties have been noted, with management expressing caution in capital allocation, which could affect future net margins and shareholder returns.
- Weather-related disruptions and leap year comparison issues caused significant challenges, particularly in the Midwest & South segment, potentially impacting future revenue stability.
- The transition of existing properties like Par-A-Dice and associated costs may not achieve the same returns as previous projects, which could affect projected financial gains and net margins.
- The management's strategic focus on maintaining a strong balance sheet amidst economic uncertainty might limit aggressive capital return strategies, impacting future earnings and shareholder value.
Valuation
How have all the factors above been brought together to estimate a fair value?- The analysts have a consensus price target of $89.923 for Boyd Gaming based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $101.0, and the most bearish reporting a price target of just $80.0.
- In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $3.5 billion, earnings will come to $556.3 million, and it would be trading on a PE ratio of 13.8x, assuming you use a discount rate of 10.2%.
- Given the current share price of $83.3, the analyst price target of $89.92 is 7.4% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
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Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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