Boyd Gaming stock sees potential boost from new tipping tax law

Investing.com - Boyd Gaming (NYSE:BYD), currently trading near its 52-week high at $81.57, maintained its Market Perform rating from Citizens JMP analyst Jordan Bender, who highlighted potential benefits from recent tax legislation affecting tipped workers. According to InvestingPro data, the company has demonstrated impressive financial health with a 61.62% gross profit margin.

The new bill allows tipped employees to deduct up to the first $25,000 of voluntary tips from their taxes, according to the analyst’s commentary. While workers must still pay taxes on tips as they occur, these amounts can be deducted when filing tax returns.

This tax structure is expected to result in larger tax refunds during tax season, potentially creating an uplift to revenue for Boyd Gaming during the first and second quarters of the year.

During a recent trip to Las Vegas, Citizens JMP noted that gaming operators expressed uncertainty about the precise financial impact of the legislation on their businesses, but the firm views it as a positive catalyst for companies like Boyd Gaming.

The tax exemption on tips is not permanent, however, as the provision is set to expire in 2028, creating a limited timeframe for this potential revenue benefit.

In other recent news, Boyd Gaming Corporation reported strong financial results for the first quarter of 2025, surpassing both earnings and revenue projections. The company achieved an earnings per share of $1.62, exceeding the expected $1.55, and reported revenues of nearly $1 billion, higher than the forecasted $977.18 million. Analysts at Mizuho (NYSE:MFG) Securities expressed confidence in Boyd Gaming by raising the stock price target to $86, following the company’s financial performance that exceeded expectations in several key metrics. Boyd Gaming’s total property EBITDA reached $361.3 million, outperforming projections from both Mizuho and the Street.

Stifel analysts also raised their price target for Boyd Gaming to $76 from $71, maintaining a Buy rating, citing the company’s consistent performance and strong position in the gaming industry. Meanwhile, JPMorgan initiated coverage on Boyd Gaming with a neutral rating and a $79 price target, acknowledging the company’s growth pipeline and valuable stake in FanDuel. Boyd Gaming’s management highlighted ongoing strategic property developments and online segment growth as key performance drivers. The company also repurchased $328 million worth of shares during the quarter, reflecting its commitment to capital return. These developments indicate Boyd Gaming’s robust financial health and operational efficiency in the current economic climate.

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