Mizuho cuts Boyd Gaming stock target to $83, keeps Outperform

On Wednesday, Mizuho (NYSE:MFG) Securities adjusted its outlook on Boyd Gaming Corporation (NYSE:BYD), lowering the price target from $86.00 to $83.00, while maintaining an Outperform rating on the company’s shares. Currently trading at $65.79, the stock remains below InvestingPro’s Fair Value estimate, with analyst targets ranging from $72 to $88. The revision reflects a recalibration of expectations for the company’s first-quarter performance in 2025, with earnings scheduled for April 24.

Mizuho’s analysis indicates a projected property EBITDAR of $349.4 million for Boyd Gaming in the first quarter of 2025, a decrease from the previous estimate of $361.4 million and slightly below the consensus estimate of $354.1 million. The company, which generated $1.22 billion in EBITDA over the last twelve months and maintains impressive gross profit margins of 61.86%, faces challenges. The firm’s analysts attribute the adjustment mainly to softer market growth within the company’s Local segment, which is now expected to contract by 0.5% year-over-year, down from a previously anticipated growth of 1%.

In the Downtown segment, Mizuho forecasts EBITDA of $17.8 million, which is lower than the earlier projection of $20.2 million and the market consensus of $18.1 million. The downward revision is largely due to a market decline of 3.5%, which is steeper than the 3.0% decline previously estimated.

For the Midwest and South regions, the firm estimates EBITDA at $180.8 million, which is a decrease from both the previous estimate of $185.7 million and the market consensus of $181.7 million. The analysts note that this adjustment is driven by weather-related impacts and softer than expected results in March.

However, Mizuho’s estimate for Boyd Gaming’s Digital segment remains unchanged at $20.8 million, despite being lower than the market’s expectation of $22.2 million. This indicates that while some areas of the business may be facing challenges, the Digital segment maintains its forecasted performance level.

The revised price target suggests that Mizuho Securities still sees potential in Boyd Gaming’s stock, despite the adjustments made to the company’s financial projections for the upcoming quarter. InvestingPro data reveals that while 8 analysts have revised their earnings downward for the upcoming period, the company maintains a "GOOD" overall financial health score. Discover more insights and 6 additional exclusive ProTips with an InvestingPro subscription.

In other recent news, Boyd Group Services reported a 1.7% year-over-year increase in sales for Q4 2024, reaching $752.3 million, despite a challenging market environment. However, the company’s adjusted EBITDA fell by 11.5% to $83.4 million. Boyd Group Services is undergoing a major transformation with Project 360, targeting $100 million in annual cost savings, and added 155 new locations in 2024. The company plans to open 28 new greenfield locations in 2025. Annual sales for Boyd Group Services reached $3.1 billion, a 4.2% increase year-over-year, while net earnings dropped to $24.5 million from $86.7 million the previous year. Meanwhile, Truist Securities lowered its price target for Boyd Gaming to $85 from $92, maintaining a Buy rating, due to a decline in visitation and gaming revenue on the Las Vegas Strip. Analyst Barry Jonas noted a 14% year-over-year decrease in February’s Gross Gaming Revenue on the Strip. Despite these challenges, Jonas expressed optimism about potential improvements in March.

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