Boyd Gaming Faces Lower Earning Predictions
Gambling analysts have dropped their forecasts of potential revenue for casino operator Boyd Gaming. Industry observers feel that the economic conditions nationwide will continue to affect Boyd's target market for its Nevada casinos, which is composed of locals and budget-conscious travelers.
The Associated Press reported that analyst Jeffrey Logsdon of BMO Capital Markets dropped per-share earnings predictions from 78 cents to 62 cents for 2009, and from 92 cents to 77 cents in 2010. Logsdon was quoted as saying, "We now estimate 2009 to experience a year-over-year decline in net revenue that is close to 5 percent versus our previous estimate for revenues to be flattish."
Like most gaming stocks, Boyd Gaming has lost significant value over the past twelve months. From a high near forty dollars a share, the price has fallen to a new low of $2.81 Friday after Logsdon's announcement. But a late rally by investors looking for bargains actually propelled the stock to a strong close, finishing at $3.29 for a rise of almost nine percent for the day.
OCA's head gambling analyst, Sherman Bradley, noted that the adjusted earnings forecast still left the stock a good buy in light of competitors' situations. For instance, Bradley pointed out, predicted earnings for Las Vegas Sands shares were adjusted to as low as seven cents each.
Boyd has been praised by experts for being the first casino operator to demonstrate fiscal restraint, when it suspended its Echelon project. And Boyd has also received positive feedback for concentrating its efforts on pleasing a neglected market niche in locals and cost-conscious patrons. But that clientele is suffering from the overall loss of revenue flowing into Las Vegas, and that leaves less for Boyd slots and table games.
