Jefferies Equity Research analysts spent June 6-9 in Las Vegas and came back with mixed sentiments. Their findings were laid out by David Katz in a June 11 investor note.
The good news, from Katz’s point of view, was “solid Strip trends, supported by a healthy convention cycle.” Still, his favored stock in the gaming group remained off-Strip Station Casinos.
The less-good news was that low-end leisure travel remained “unresolved.” Also, economic factors were beginning to depress locals-casino action. But “favorable demographics and recent capital deployment support a constructive outlook,” Katz wrote.
The analyst found Strip foot traffic as expected, including typical summer tourism. Conventions were bolstering nighttime casino play. MGM Resorts International executives, in particular, projected year-over-year cash-flow growth.
Katz felt the MGM outlook was supported by midweek convention business, “though offset by pockets of consumer softness, notably Canadian and lower-tier customers.” Contrary to MGM, he did not think that an uplift from all-inclusive Strip offerings was yet manifest. “Management commentary and our checks suggest limited traction to date,” Katz added.
“Overall, we remain cautious on Strip fundamentals until there is clearer sustained momentum in visitation trends,” Katz summarized. He observed that signals of demand remained uncertain, with no sign of a durable change in sight.
Looking toward the end of 2026, both Station and Boyd Gaming told Katz they anticipated some downward pressure. But they did not expect trends to worsen into 2027. “Still, we continue to believe the core locals customer is growing and becoming wealthier, which should support long-term trends,” Katz assured his readers.
Speaking of Station properties, “Durango remains a flagship property in the market and we expect others will aim to create a similar style,” Katz reported. “This was evident at Green Valley Ranch with ongoing capital projects beyond the room renovations, focused on brightening the property and offering desirable non-gaming amenities.”
Although Katz had reduced his Station revenue projections, citing seasonality and construction upheaval, he remained upbeat on the company. He cited its “proven ability to execute and visible growth pipeline” as causes for optimism.
As for Boyd, Katz described a company that was targeting higher-yield customers, “through a consistent, rational, customer-reinvestment strategy.” Destination-oriented business was said to be still soft, but on the locals front, Cadence Crossing (which put a short-term dent in nearby Sunset Station’s business) was characterized as having a strong opening.
Boyd management was described as shying away from new projects, as well as M&A activity. Its preferred methods of improving returns were reinvestment in existing properties and share repurchases.
With regard to igaming, Boyd was keeping a watchful eye on it, but not participating actively. MGM, by contrast, was expecting a successful online launch in Alberta, buoyed by a market-leading position in Ontario.
Due to slowness in regulation and maturing markets, top-line growth in igaming was said to be decelerating. Prediction-market encroachment was also cited as a risk. “Combating this, operators are increasing focus on their core offering to increase share in digital channels they believe they can dominate,” Katz reported.
Prediction markets were mostly cannibalizing online sports betting, he continued, and customer acquisition was becoming costlier as a consequence. Nor did executives interviewed by Katz think that prediction markets wouldn’t try to enter igaming itself with event contracts. But casino executives were not without a plan.
“Looking ahead, market participants suggested that an increasing focus on crash/arcade-style igaming could be the next growth engine,” Katz finished.
