Loop Capital starts off coverage on Boyd Gaming Corporation (NYSE:BYD) with a Buy rating.
Analyst Daniel Adam pointed to the potential for free cash flow growth to fuel increased capital returns to shareholders, as well as BYD's consistently profitable and growing online gaming business.
"Unlike other domestic online sportsbook operators, BYD has consistently shown profitability in its sports betting business via its partnership and market access rights agreements with FanDuel. In fact, BYD expects online gaming to contribute roughly $30mn of positive EBITDAR this year, up from $24mn last year and ~$10mn in 2020."
Other highlights of the BYD bull case called out were the real estate optionality for the company and the exposure to the Las Vegas Locals market.
Loop Capital's price target on BYD of $86 works out to a target multiple of 9X to the 2023 EBITDA estimate, roughly in- line with the stock's median historical forward EBITDA multiple.
Shares of Boyd Gaming Corporation (BYD) are 1.81% higher in premarket action to $50.52.