Say what you want about where the state of the gaming industry stands in Las Vegas, but one thing is for sure, the locals market is booming. This growing market has benefited quite a few gaming companies, with Boyd Gaming Corp. being one.
The company’s stock price recently reached over $15 a share, a 52-week high, up 35 percent from a year ago, and up 7 percent in the last three months. Boyd Gaming Corp. CEO Keith Smith, in a first quarter earnings conference call, said, “There is still considerable room for improvement with the consumer and we need to see more durability. But the trends are encouraging and continue to move in the right direction.”
Credit Suisse gaming analyst Joel Simkins raised Boyd’s target price to $18 a share. He said the signs are all there, pointing to a growing local population, more jobs, rising visitation, and the fact consumers are simply spending more. Station Casinos officials gave similar sentiments in May.
Gaming mogul and Wynn Resorts Ltd. Chairman Steve Wynn does not seem as hopeful, saying Las Vegas was “weak” and he would be thrilled if his company’s numbers stayed flat from last year. One interesting growth segment for Boyd has been from non-gaming amenities, something the locals market has not been known for in the past.
Boyd also owns the Borgata, which seems to be one of the only bright spots in Atlantic City right now. “Borgata is gobbling up (market) share in Atlantic City,” Simkins said. The Boyd locals’ casinos and three Downtown projects account for 21 percent of the company’s $542 million to $567 million cash flow projection.
One added positive note for Boyd is that there are currently no new local casinos looking to be built in the near future. Simkins said, “The most desirable (casino) locations are spoken for and there is limited appetite for new projects.
