Will This Price Target Decrease Hurt Boyd Gaming (BYD) Stock Today? (Update)

Update (9:45 a.m.): Updated with Thursday market open information.

NEW YORK (TheStreet) -- Barclays decreased its price target on Boyd Gaming  (BYD) to $7, decreased its estimates and set an "equal weight" rating. The slower ramp on online gaming drove the firm's decision.

The stock was down 1/22% to $10.51 at 9:45 a.m. on Thursday.

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Separately, TheStreet Ratings team rates BOYD GAMING CORP as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate BOYD GAMING CORP (BYD) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • BOYD GAMING CORP has improved earnings per share by 14.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, BOYD GAMING CORP continued to lose money by earning -$0.87 versus -$10.30 in the prior year. This year, the market expects an improvement in earnings ($0.08 versus -$0.87).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Hotels, Restaurants & Leisure industry average, but is less than that of the S&P 500. The net income increased by 15.1% when compared to the same quarter one year prior, going from -$7.28 million to -$6.18 million.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.2%. Since the same quarter one year prior, revenues slightly dropped by 3.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • 39.77% is the gross profit margin for BOYD GAMING CORP which we consider to be strong. Regardless of BYD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BYD's net profit margin of -0.87% significantly underperformed when compared to the industry average.
  • BYD has underperformed the S&P 500 Index, declining 21.48% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • You can view the full analysis from the report here: BYD Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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