While shares of Boyd Gaming have been a “healthy relative outperformer” over the last several years by keeping its growth-engine alive, Deutsche Bank has classified the stock as a Hold in 2025 as it deals with competition from Red Rock Resorts. It is more bullish for 2026, especially with Boyd’s stake in FanDuel.
The firm has a price target of $72, the same at which it’s ending 2024.
Despite contracting EBITDAR in the Las Vegas locals market, downtown Las Vegas, and the Midwest and South segments in both 2023 and 2024, Boyd has been able to maintain 2022 adjusted EBITDAR levels, given growth in its online and managed segments, thus creating “a favorable relative-adjusted EBITDAR dynamic,” according to Deutsche Bank analyst Carlo Santarelli.
“Looking ahead, while little is expected in 2025 from a capital-spend and development-pipeline perspective, other than the lingering benefits from the Treasure Chest land-based move, developments should bear fruit for Boyd in 2026,” Santarelli said. That includes a full year to benefit from the Norfolk joint-venture casino development with the temporary facility opening in late 2025 ahead of the permanent opening in 2027.
The Cadence Crossing casino project in suburban Las Vegas (east Henderson) is slated to open in early 2026. In addition, ongoing 2025 nationwide property-level projects include room renovations at the IP Casino Resort, the Orleans, and Valley Forge. Renovations are also ongoing at the Suncoast in northwest Las Vegas and the convention facility at Ameristar St. Charles, which Santarelli said should provide tailwinds in 2026.
The Gold Coast and Orleans are the keys to Las Vegas locals performance in 2025, Santarelli said. Locals property EBITDA has been down on a year-over-year basis in each of the last six quarters, dating back to the second quarter of 2023. The rate of decline has accelerated from mid-single-digit declines over the second half of 2023 to high-single- to low-double-digit declines over the first through third quarters of 2024.
“The acceleration in the property EBITDA declines primarily relate to the opening of Durango (Casino & Resorts in southwest Las Vegas) and the promotional trigger stemming from the opening, with the promotional activity in the market hampering both the Gold Coast and the Orleans,” Santarelli said. “At present, the headwinds at both properties are causing a greater than 300-basis-point drag on the locals-segment adjusted-EBITDAR margins. With the Durango anniversary and some of the incremental promotional competition, we believe stability and potentially growth off a lowered base could serve as a positive surprise, assuming a relatively stable same-store environment.”
Santarelli said they continue to believe a monetization of the FanDuel stake is a primary driver of the bull case for Boyd, especially as it relates to the inexpensive valuation dynamic, as a sale “would likely further the bull case for a core that is perceived to be undervalued.”
Boyd owns a 5% stake in FanDuel for which the value of the position ranges from $600 million to $1.2 billion, Santarelli said. Management has repeatedly referred to the stake as a “strategic asset” and while the valuation of the FanDuel stake could ultimately inspire Boyd to monetize the position, “we believe a strategic acquisition would be an equally likely scenario in which Boyd chooses to fund the transaction with proceeds from the sale.”
Santarelli said the consensus forecasts for Boyd are a “touch high (2%),” with expectations around the Las Vegas locals market standing out as “being slightly aggressive.” While Boyd revisions in 2024 were “modestly negative, shares acted well,” given an inexpensive valuation. “We believe upside to estimates, while unlikely in our view, could further unlock what remains in our opinion a reasonable valuation.”
Santarelli said the $72 price target is based on a SOTP approach, in which Deutsche Bank applies property-level multiples they believe to be “historically and relatively appropriate” to 2025 earnings property-level EBITDAR. In addition, they make equity-value adjustments for Boyd’s ownership stake in FanDuel and the net present value of its management fees with the Wilton Rancheria Tribe in northern California.
