Nomura Securities on Nevada's May Gaming Revenues: Investor Reaction to Boyd (BYD) Favorable

July 13, 2012 9:39 AM EDT
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Nomura Securities on Nevada's May Gaming Revenues

Analyst, Harry Curtis, said, "The May headline decline of 18.15% was primarily driven by low table hold. Baccarat win was down 46.7% YOY, with baccarat volume down 22% and win rate down 384bps. Domestic table win was down 18.2% on hold of 10.3% vs. average hold of 12%, though volume was up 2.3%. Slot revenues were down 3.1% with slot handle down 6.7% and slot hold 30bps higher YOY. Q2 Strip headline growth could be down high single digit/low teens, with revenue growth ex-baccarat down in the low-to-mid single digit range. Slot revenues were up 6.4% while table game revs were up 7.4%. We expect investors in Boyd (NYSE: BYD) (Neutral) to react favorably, although we caution that 4Q’11 and 1Q’12 promotional activities in the market were high and flow-through low, so the Q2-to-date number could be a continuation of this market trend."

"June is not a seasonally strong baccarat month so we don’t expect much surprise there (note: YTD baccarat volume is up 4.5% thru May). Gaming revenues could be a source of downside for certain Strip operators in Q2, including MGM (NYSE: MGM), Las Vegas Sands (NYSE: LVS) and Wynn (Nasdaq: WYNN)."

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