Deutsche Bank Flags Attractive Risk/Reward in Boyd Gaming and Penn Entertainment After Macro-Driven Declines
Deutsche Bank upgraded Boyd Gaming and Penn Entertainment to buy after 21.6% and 31.4% share declines over 90 days, driven by macro factors not fundamentals. Price targets raised to $99 and $25 from current ~$70 and ~$15.80 levels. Growth projects and deleveraging to sub-5.0x by end-2027 cited as support.
SCCG Take — Regional casino operators with disciplined buybacks and project pipelines now offer clearer entry points. Leverage metrics and same-store trends through 2027 will test whether valuations re-rate.
Deutsche Bank analyst Steven Pizzella upgraded Boyd Gaming (BYD) and Penn Entertainment (PENN) to buy from hold. Shares of the regional casino operators have declined 21.6% and 31.4% over the past 90 days. New price targets sit at $99 for BYD and $25 for PENN, against current levels near $70 and $15.80.
The upgrades follow a selloff tied primarily to macro concerns and risk-off sentiment rather than fundamental weakness, according to Casino.org News. September results showed improving trends at both companies’ venues, with momentum extending into October.
Boyd Gaming’s Cleaner Setup and Capital Return Profile
Pizzella expects Boyd’s operations to strengthen in the current quarter and into 2027. Support comes from the Suncoast Las Vegas renovation plus projects at Par-A-Dice, Amelia Belle, Cadence Crossing, Suncoast, The Orleans, and the Norfolk opening scheduled for late 2027.
The analyst highlighted the company’s capital allocation track record. “BYD’s capital return story remains attractive, in our view, supported by 2.6x net leverage on our year end 2026E, a ~$150 million quarterly share repurchase program (~12% annualized buyback yield), and a modest ~1.1% dividend yield,” says the analyst.
Penn Entertainment’s Leverage Trajectory and Earnings Catalysts
Penn shares have tracked Treasury yields closely since the Ameristar transaction. Continued deleveraging should widen the investor base and restore flexibility for repurchases.
“Continued progress toward sub 5.0x net leverage should broaden the potential investor base while increasing flexibility for incremental share repurchases. We estimate PENN would fall below 5.0x lease adjusted net leverage by year end 2027, even after incorporating ~$50 million of share repurchases into our forecasts.” Recently completed projects in Illinois, Ohio, and at the M Resort in Henderson, Nevada, are expected to lift future earnings.
The upgrades center on the gap between current valuations and visible operational improvements. Leverage reduction and capital returns become more salient if macro pressures recede. Operators in this segment must still navigate interest-rate sensitivity and uneven consumer demand through 2027.
Reporting: Casino.org News
Generated by SCCG’s automated editorial system from published source reporting. SCCG Management holds editorial responsibility.
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