Wells Fargo Resumes Coverage on Boyd Gaming (BYD) at Market Perform; Challenging Markets, But Strong FCF And Optionality

Wells Fargo resumes coverage on Boyd Gaming (NYSE: BYD) with a Market Perform. PT range $6-$7.00.

Wells analyst says, "Certainly, in our view, there are some positives: (1) strength in some of BYD's regional properties; (2) $1.05 per share of free cash flow (FCF) expected in 2012; and (3) low investor expectations. However, we rate the shares Market Perform given that (1) several of BYD's properties are likely to face new competitive threats through 2012-14; (2) the important Las Vegas locals market is showing little top-line strength and could become more competitive; and (3) we believe total U.S. regional gaming revenue growth is likely to be low for the next 2-3 years. With our 2012 adjusted net EBITDA estimate of $475.5 million 5% below the consensus and the stock trading at 9.6x our 2012 net EBITDA estimate (less minority), we expect the stock to perform in line with the market until there is more clarity on new competition and the economic outlook."

For an analyst ratings summary and ratings history on Boyd Gaming click here. For more ratings news on Boyd Gaming click here.

Shares of Boyd Gaming closed at $6.05 yesterday.

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