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Composite Rating
Industry Group Ranking
Emerging Pattern
High RS
A stock with a relative strength line that is rising or in new high ground. The RS line tracks a stock vs. the S&P 500. An RS line hitting a new high with or before a stock makes a new high is bullish.
Boyd Gaming (BYD) is the IBD Stock Of The Day, just ahead of Super Bowl Sunday — sports betting’s biggest weekend. BYD stock popped past a buy point on Wednesday.
Founded in 1975, Boyd Gaming’s portfolio includes hotels, casinos, breweries, resorts and spas. Unlike the larger casino owners, Boyd plays strictly in the U.S., operating 28 properties in 10 states across the country, including Nevada, the Midwest, and the South.
But BYD stock, along with the big international names such as MGM Resorts (MGM) and Las Vegas Sands (LVS), were hit hard during pandemic closures in 2020.
Boyd Gaming’s total revenue in 2020 dropped nearly 35% from 2019, and the company posted a net loss.
But as vaccines became available, casinos welcomed visitors back. At first, limited capacity and Covid variants slowed the reopening process. But by the end of 2021, casinos began to operate near full capacity. Nevada on Thursday entirely dropped its statewide mask mandate.
As restrictions eased, Boyd’s total revenue for fiscal 2021 reached around $3.4 billion, a 55% increase over 2020 and a modest increase vs. 2019’s $3.3 billion.
While fundamentals suffered, Boyd stock gained 43% across all of 2020. It rallied the first four months of 2021, then slipped into a consolidation.
A look at the balance sheet shows the Las Vegas-based company has now rebounded with three straight quarters of triple-digit earnings growth. Revenue has also increased three quarters in a row.
Fourth-quarter earnings skyrocketed 193% to 1.35 a share, while sales surged 38.4% to $882 million. For all of 2021, Boyd had EPS of $5.12 vs. a 15-cent loss the year before.
Shares fell 1.6% to 69.57 on the stock market today, reversing lower after nearing their 52-week high of 72.72. Boyd stock is extended from a double-bottom buy point of 67.09, according to MarketSmith.
While the stock is out of buy range right now, watch to see if it pulls back toward the buy point or perhaps to the 50-day line after it rises above the buy point.
Boyd stock is showing strength. Its relative strength line has spiked in recent days. BYD stock’s RS Rating is 92 out of a best-possible 99. Its EPS Rating is 74.
Among other casino stocks showing improvement in recent days, MGM stock climbed 2.1% for the week to 45.46, despite retreating late in the week. MGM stock has an official buy point of 51.27. It has an early entry at 46.74. Shares popped above their 50-day moving average in recent days and could be starting to form a handle.
Meanwhile, Las Vegas Sands stock, which sank 3.2% to 45.16 on Friday, has seen its stock rise more than 20% in 2022.
Penn National Gaming (PENN) fell 2.8% and had been slumping for several months, but moved back above its 50-day line in recent days.
Online gambling expert DraftKings (DKNG) rallied 6.6% for the week, and leaning into the third week of a rebound after a five-month slide.
The Los Angeles Rams face off against the Cincinnati Bengals in Super Bowl LVI in Los Angeles on Feb. 13. the game is expected to rake in $1 billion in legal wagers from across the country, according to PlayUSA, which provides gaming industry news and analysis. That’s good news for gambling stocks like Boyd Gaming and others.
If sportsbooks reach those estimates, it would roughly double last year’s estimated Super Bowl handle of more than $500 million.
The Super Bowl is the most-wagered-on single sporting event in the U.S.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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