FanDuel Stake Sale and Buyback Expansion Could Be a Game Changer for Boyd Gaming (BYD)

• Boyd Gaming recently reported strong second-quarter results, highlighted by year-over-year growth in revenue and earnings, and announced the sale of its 5% equity stake in FanDuel to Flutter Entertainment for approximately US$1.76 billion.
• The company expanded its share repurchase program and plans to use proceeds from the FanDuel sale to reduce debt, signaling a focus on financial strength and shareholder returns.
• We'll examine how the FanDuel stake sale and buyback expansion may influence Boyd Gaming's capital allocation strategy and earnings outlook.

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Boyd Gaming Investment Narrative Recap

For those considering Boyd Gaming, the core investment narrative rests on the stability and growth potential of its regional casino operations, balanced by disciplined capital allocation. The recent sale of Boyd’s 5% equity stake in FanDuel for approximately US$1.76 billion, coupled with a buyback expansion, strengthens the balance sheet and likely enhances flexibility for growth initiatives, though it does not fundamentally shift the importance of Boyd’s ability to compete with digital gaming rivals, still the biggest risk facing the company in the near term.

Among recent developments, Boyd’s aggressive share repurchase program stands out, with 34.38% of shares retired since 2021 and an increase in buyback authorization following the FanDuel sale. This move underscores the company’s intent to return capital to shareholders, but it should be considered in light of both the benefits and opportunity costs, especially as digital competition intensifies and traditional casino market share faces pressure from online alternatives.

Yet, while buybacks continue to boost returns, investors should also ask whether discipline in capital allocation is enough to offset the persistent headwinds from...

Read the full narrative on Boyd Gaming (it's free!)

Boyd Gaming's outlook anticipates $3.5 billion in revenue and $556.3 million in earnings by 2028. This scenario reflects a 4.3% annual revenue decline and a decrease of $8.2 million in earnings from the current $564.5 million.

Uncover how Boyd Gaming's forecasts yield a $89.92 fair value, a 4% upside to its current price.

Exploring Other Perspectives

Four Simply Wall St Community members estimated Boyd Gaming’s fair value between US$64.03 and US$111.47. As digital competitors continue to grow, this wide range shows just how differently investors can view Boyd’s future, explore these perspectives to see which aligns with your outlook.

Explore 4 other fair value estimates on Boyd Gaming - why the stock might be worth as much as 29% more than the current price!

Build Your Own Boyd Gaming Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Boyd Gaming research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Boyd Gaming research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Boyd Gaming's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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