The firm said it raised its rating on the casino operator based on positive management meetings.
Credit Suisse recently held investor meetings with Boyd's CEO and CFO and said they walked away with the view that there is increased stability and the potential for modest growth in core markets, including Las Vegas and Atlantic City.
The firm believes that the company will also benefit from the gradual improvement to the Las Vegas market.
Credit Suisse raised its price target on Boyd Gaming to $18 from $17.
Shares of Boyd Gaming closed at $14.32 on Friday afternoon.
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 solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 616.66% and other important driving factors, this stock has surged by 31.41% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- BOYD GAMING CORP reported significant earnings per share improvement 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 two years. 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 -$0.48 versus -$0.87 in the prior year. This year, the market expects an improvement in earnings ($0.36 versus -$0.48).
- 41.28% is the gross profit margin for BOYD GAMING CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.37% trails the industry average.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, BOYD GAMING CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The debt-to-equity ratio is very high at 7.11 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, BYD has a quick ratio of 0.55, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- You can view the full analysis from the report here: BYD Ratings Report