BYD: Digital Gaming Caution And Share Repurchases Will Shape Future Return Profile

Analysts have nudged their price target on Boyd Gaming slightly higher to about $92 from about $91.80, citing solid underlying fundamentals and an attractive valuation profile, even as they adopt a more cautious outlook on digital gaming growth.

Analyst Commentary

Bullish Takeaways

Bullish analysts highlight that the recent price target increases, into the mid to upper $90s range, still leave room for upside relative to current trading levels. This supports the view that the shares remain attractively valued.
They point to solid underlying fundamentals, including resilient regional casino performance and disciplined cost control, as evidence that Boyd can continue to deliver steady earnings growth even if macro conditions soften.
While digital gaming is expected to capture a significant portion of future industry growth, bullish analysts argue that Boyd is positioned to participate in this trend without overextending its balance sheet or diluting returns from its core brick and mortar operations.
Recent positive revisions are framed as confirmation that prior expectations were too conservative. Analysts suggest that continued execution on capital allocation and margin management could drive further estimate and target upgrades.

Bearish Takeaways

Bearish analysts caution that a neutral stance on digital gaming growth implies limited near term upside from that segment, especially given heightened competitive and regulatory pressures across key markets.
There is concern that a greater share of industry growth accruing to digital channels could compress returns for traditional casino assets over time, which could challenge Boyd’s ability to sustain its historical growth rates.
Some remain wary that recent price target increases may already reflect much of the near term operational improvement. This leaves the risk of multiple compression if growth in digital or regional markets underwhelms.
Execution risk around balancing investments between digital initiatives and core properties is also highlighted, with bearish analysts noting that missteps on marketing, promotions or technology spending could weigh on margins and valuation.

What's in the News

Cboe Global plans to launch a federally regulated prediction markets platform that will initially exclude sports related products, highlighting growing competition and financial market interest around gambling style event contracts that reference companies such as Boyd Gaming (Bloomberg)
Boyd Gaming completed a major share repurchase tranche between July 1, 2025 and September 30, 2025, buying back 1,903,611 shares, or 2.36 percent of shares outstanding, for 160 million dollars (company disclosure)
Since announcing its buyback on October 26, 2021, Boyd has cumulatively repurchased 35,199,044 shares, representing 36.76 percent of its shares, for a total of approximately 2.25 billion dollars, reinforcing management’s focus on shareholder returns (company disclosure)

Valuation Changes

Fair Value: nudged slightly higher to approximately $92.00 from $91.80, reflecting a modest upward adjustment in intrinsic value estimates.
Discount Rate: risen slightly from about 9.27 percent to about 9.34 percent, implying a marginally higher required return and risk premium.
Revenue Growth: revised upward, with the expected decline moderating from roughly negative 1.28 percent to about negative 0.49 percent, indicating a less severe contraction outlook.
Net Profit Margin: edged down from around 5.40 percent to about 5.27 percent, signaling a small expected compression in profitability.
Future P/E: increased marginally from roughly 35.68x to about 35.83x, suggesting a slightly higher valuation multiple on forward earnings.

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.What are the underlying business or industry changes driving this perspective?

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 4.7% annually over the next 3 years.
Analysts assume that profit margins will increase from 14.0% today to 16.1% in 3 years time.
Analysts expect earnings to reach $563.3 million (and earnings per share of $8.39) by about September 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 12.1x today. This future PE is lower than the current PE for the US Hospitality industry at 23.9x.
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 10.19%, 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 $90.769 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 $563.3 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 $85.34, the analyst price target of $90.77 is 6.0% 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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