“No gaming consumer slowdown, at least not yet.” That was the headline of JP Morgan analyst Joseph Greff‘s appraisal of Boyd Gaming‘s 2Q22 earnings call. Loyalty players and core customers remain steadfast, as Boyd grew revenues 4% “despite a tough year-over-year comparison.” Unrated players are the Achilles heel, although Greff (rightly) theorizes that their 2Q21 gambling spree “was likely goosed up from stimulus checks.” While unrated play is as much as 40% of overall win, it’s not very profitable in the final analysis. Greff ratcheted his price target on BYD from $83/share down to $71 “despite limited evidence that the U.S. regional gaming consumer is slowing in any meaningful way.” Why? He predicts a 10% revenue decline next year, with serious consequences for the bottom line.

Even so, Greff likes Boyd’s regional diversity “which generates attractive free cash flow.” He’s (not unreasonably) factoring in a “mild” recession, which may be already here, and which he freely admits could be worse than modeled. Fortunately for Boyd, it is not in a position where debt reduction is necessary. Or as CEO Keith Smith put it, “We’re dealing in an uncertain environment and economy, but everything we see says the business is pretty stable. If something were to happen, given our current financial strength, we’re not losing sleep.”

Continue reading Boyd outperforms; Vegas airport sets record, joblessness drops

You know it’s a slow news week when today’s front-and-center lead story in the Las Vegas Review-Journal is that a Lotus of Siam will open in a refreshed Red Rock Resort. With nothing of pressing urgency in the press these last few days, we’ll update you with various odds and ends, such as … Cirque du Soleil‘s Love has received a one-year stay of execution at The Mirage, extended into and perhaps through 2023. All bets are off once Hard Rock International consummates the purchase. Only CEO Jim Allen knows for sure and he ain’t talking, including addressing the bigger question of whether The Mirage proper will remain open during the massive rebranding of the resort. Love‘s marquee is conspicuously missing from the Hard Rock rendering above …

Continue reading Jottings for a Tuesday

Despite attenuated revenues of $1.2 billion in the second quarter, Las Vegas Sands was the beneficiary of what one analyst termed “creeping expectations” on Wall Street. Or, as Deutsche Bank‘s Carlo Santarelli put, “we continue to believe LVS represents one of the more compelling medium- to longer-term risk-reward stories in our coverage universe.” How come? Managed expectations, in large part. Losses in Macao were not as bad as feared and Marina Bay Sands in Singapore (55% of the company’s equity now) is prompting higher forecasts, as the city-state loosens its Covid-19 restrictions. Regarding Macao, “management had little to say” but numbers were “soft” and the company expects to lose $110 million a month in cash flow and rents as long as the current shutdown persists.

Continue reading “Standout” at Sands; Station challenges South Point

Ocean Casino Resort has unveiled its pricey new sports book and our Atlantic City correspondent deems it nothing short of “spectacular! In the center is a circular bar, surrounded by TV screens. There is a set of steps (and elevator) to the Balcony Bar overlooking the main area. Borgata‘s sports book used to be number-one in being attractive. Not any longer.” Our man on the town stayed at Hard Rock Atlantic City and reports “it’s much nicer here at Hard Rock than Bally’s; here you can choose from four or five breakfast places that are open.” Meanwhile, all bets are off for the Golden Nugget and Resorts Atlantic City. They have until Tuesday to reach terms with Unite-Here and if they poor-mouth the union then pickets are a certainty.

Continue reading Atlantic City notes; MGM Singapore?; Mega-Jottings