Boyd Gaming (BYD) and Penn National Gaming (PENN) Poised to Restart - Nomura/Instinet

Nomura/Instinet analyst Harry Curtis lowered the price target on Boyd Gaming (NYSE: BYD) to $22.00 (from $39.00) while maintaining a Buy rating on the belief that the company should be able to restart operations gradually in May, with EBITDAR recovering to ~50% of 2019 peak in 2021 and to ~80% in 2022. He sees upside to $22 in BYD in the next 12-18 months and to $19 (reduced from $39) for Penn National Gaming (NASDAQ: PENN).

The analyst sees 5 factors determining the pace of reopening and GGR recovery:

Location: Casinos in lower density areas could reopen perhaps as early as May in OH, IA, MS, IN, and in the more rural regions of PA.

States’ Need for Tax Revenue

Expectation for the Pace of Recovery: when casinos reopen, visitation and gaming position occupancy will likely be limited to ~50% for a 60-90 day period to give regulators and state health officials time to monitor reinfection rates

Expectation for the Pace of Profitability: Casinos will not reopen unless they can be cash flow positive from day one.

Liquidity/Balance Sheet Position: PENN and BYD have cash/revolver capacity to survive near zero revenue for nine and 11 months

You May Also Be Interested In

• Amer Sports Inc. (AS) PT Lowered to $42 at Truist, but 'Momentum continues to surge in a tough macro'
• Palo Alto Networks (PANW) PT Raised to $390 at UBS, Neutral Rating Maintained
• Home Depot (HD) PT Raised to $354 at Bernstein SocGen Group