Todd Shriber

Posted on: July 23, 2021, 11:44h. 

Last updated on: July 23, 2021, 12:44h.

Boyd Gaming (NYSE:BYD) reports second-quarter results next Tuesday, and the company could be among the mid- and small-cap firms that top estimates for the April through June period.

boyd gaming
Boyd Gaming’s Orleans Las Vegas. The company could beat Q2 earnings next week. (Image: Las Vegas Review-Journal)

Bank of America recently screened components of the S&P Small Cap 600 and S&P Mid Cap 400 indexes. That’s where the bank’s earnings per share (EPS) and sales estimates for the June quarter are above Wall Street consensus. Boyd is among the 10 names on the list developed by Bank of America, and the only gaming equity in the group.

The key factor to watch will be inflation impacts — particularly wages given small caps are more labor-intensive than large cap,” according to a note released earlier this week by a team of analysts led by Jill Carey Hall.

Up 31 percent year-to-date, Boyd is one of the better-performing gaming stocks this year. However, shares of the regional casino operator are off 13.8 percent over the past 90 days — weakness that’s accelerating with a 7.68 percent drop over the past month, as the delta variant of the coronavirus has plagued travel and leisure equities.

What Boyd Q2 Earnings Could Look Like

Analysts expect the Orleans operator will report earnings of 88 cents a share on revenue of $770.3 million for the June quarter.

“Boyd Gaming’s second-quarter 2021 performance is likely to have benefited from strengthening consumer confidence, other entertainment options, and disciplined operating strategy,” according to Zacks Investment Research. “As vaccinations continue to roll out, customers are growing more comfortable with resuming their pre-pandemic activities.”

However, analysts and investors are likely to focus on any outlook offered by Boyd for the current quarter and beyond, particularly against the backdrop of a resurgence in COVID-19 cases. While Clark County reinstituted its indoor mask policy, some states, including Hawaii, are warning residents against traveling to Las Vegas.

Specific to Hawaii, Sin City is often referred to as the “ninth island,” and nearly all Hawaiians that visit the US casino center stay at Boyd properties.

Boyd Earnings Trends

Las Vegas-based Boyd runs 28 gaming venues across 10 states, including 11 in its home city. Its Sin City venues include the Aliante, Gold Coast, Main Street Station, Sam’s Town, and the Orleans.

For 2021, analysts expect the casino operator to earn $3.40 a share on revenue of $3.11 billion. The company is on a four-quarter streak of beating EPS estimates. Over the past 90 days, nine analysts boosted second-quarter EPS forecasts on Boyd.

Analysts believe that the Boyd margin story that was built due in large part to the coronavirus pandemic can remain in place as COVID-19 fades. They also said that the operator will capitalize on its prime positioning in the Las Vegas locals market.

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