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Investing.com - Stifel raised its price target on Boyd Gaming (NYSE:BYD) to $87.00 from $76.00 while maintaining a Hold rating following the company’s announcement of a significant asset sale. The stock, currently trading at $85.37, has shown impressive momentum with a 51.76% return over the past year. According to InvestingPro analysis, the stock appears to be trading near its Fair Value, with analysts setting targets between $73 and $88.
Boyd Gaming disclosed it is selling its 5% equity interest in FanDuel Group to Flutter Entertainment plc for $1.755 billion in cash, with the transaction expected to close in the third quarter of 2025.
The company plans to use most of the proceeds to reduce debt while also returning capital to shareholders, investing in its properties, and maintaining a strong balance sheet, according to Stifel’s research note.
As part of the deal, Boyd Gaming and FanDuel will terminate certain existing market-access agreements and enter into new agreements running through 2038, providing Boyd with a fixed fee per state from FanDuel’s mobile sports betting operations in Iowa, Indiana, Kansas, Louisiana, and Pennsylvania, as well as FanDuel’s online casino operations in Pennsylvania.
Boyd Gaming now expects its Online segment will generate $50-$55 million in EBITDAR this year and approximately $30 million in EBITDAR in 2026, with Stifel’s new price target based on a 2026 sum-of-the-parts valuation.
In other recent news, Boyd Gaming announced an agreement to sell its 5% equity stake in FanDuel Group to Flutter Entertainment for $1.755 billion in cash, with the transaction expected to close in the third quarter of 2025. The proceeds from this sale will be used by Boyd to reduce its debt. Additionally, Boyd and FanDuel will enter new market-access agreements extending through 2038, impacting Boyd’s expected online segment income for the coming years. Meanwhile, Stifel has raised Boyd Gaming’s stock price target to $76, maintaining a Buy rating, citing the company’s consistent performance and strong positioning in the gaming industry. JPMorgan also initiated coverage of Boyd Gaming with a neutral rating, highlighting the company’s growth pipeline and capital return profile. Furthermore, Boyd Gaming could see potential benefits from recent tax legislation affecting tipped workers, which may boost revenue during the first half of the year, according to Citizens JMP. These developments suggest a strategic shift and a potentially positive financial outlook for Boyd Gaming amidst ongoing market dynamics.
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