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On Monday, Morgan Stanley (NYSE:MS) adjusted its stance on Boyd Gaming (NYSE:BYD), downgrading the company’s stock rating from Overweight to Equalweight and slightly lowering the price target to $81 from the previous $82. The revision by analysts at Morgan Stanley followed observations of market trends and company performance over the recent quarters. According to InvestingPro data, Boyd Gaming has shown strong momentum with a 28.7% price return over the past six months, though current analysis suggests the stock is slightly overvalued at current levels.
Stephen Grambling of Morgan Stanley noted that the previous upgrade of Boyd Gaming’s stock was based on expectations of stable trends in the Las Vegas (LV) locals market, enhanced performance in other regions, and a strategic emphasis on stock buybacks over mergers and acquisitions. These factors were anticipated to lead to a revaluation of the stock. According to Grambling, these developments have indeed occurred, resulting in Boyd Gaming’s stock outperforming its peers. The company maintains impressive gross profit margins of 61.9% and has demonstrated strong financial health, earning a "GOOD" rating from InvestingPro’s comprehensive analysis.
However, moving forward, Morgan Stanley perceives a more balanced risk-reward scenario for Boyd Gaming. While the valuation is not considered demanding, the firm recognizes that the stock’s peers have shown more significant declines. Additionally, the fundamentals in the LV locals market are now seen as more challenged compared to initial assumptions.
The research firm’s revised outlook suggests a modest 2% potential upside to Boyd Gaming’s stock, based on the new 12-month price target of $81. This assessment has led to the Equalweight rating, indicating that Morgan Stanley views the stock as fairly valued at the current levels, with limited drivers for significant outperformance in the near term.
In other recent news, Boyd Gaming Corporation announced an increase in its quarterly dividend to $0.18 per share, up from the previous $0.17 per share. This decision reflects the company’s commitment to returning value to its shareholders and is scheduled for distribution on April 15, 2025, to those on record as of March 17, 2025. Analysts from Stifel have raised their price target for Boyd Gaming shares to $82, maintaining a Hold rating, citing the company’s strong performance in the Las Vegas Locals market and growth potential in Norfolk, Virginia. Mizuho (NYSE:MFG) analysts have also increased their price target to $86, recommending the stock as Outperform due to Boyd Gaming’s better-than-expected financial results and market share gains. Boyd Gaming’s management has noted that while local revenues for 2025 might be flat or down, the overall market revenue outlook aligns with expectations. The company’s financial strength, highlighted by its robust balance sheet, has been a focal point for analysts. Both Stifel and Mizuho have expressed confidence in Boyd Gaming’s growth trajectory and market position. These developments underscore the positive sentiment surrounding Boyd Gaming’s strategic initiatives and financial health.
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