Life’s good if you’re Boyd; Caesars fire sale threatened

Boyd Gaming‘s share price got a bump from JP Morgan analyst Joseph Greff, who wrote “We continue to believe BYD is well positioned in both U.S. regional gaming markets as well as the LV Locals market.” Since Boyd is ahead of schedule on its deleveraging campaign, Greff believes that the company will put more emphasis on share buybacks and dividend increases in the second half of the year. Plus it won’t have to pay any taxes this year. The company expects cash flow derived from Las Vegas locals to grow 3%, while the Midwest and South regions should be up at least 2.5%. Boyd narrowly beat Wall Street expectations for 4Q19 cash flow ($227.5 million vs. $225 million) and posted total revenue of $833 million. Recent acquisitions continue to pay off, as cash flow at Ameristar– and Belterra-branded casinos was up 14%. Downtown continued to be a bastion of strength, generating $69.5 million on steady visitation and loyal Hawaiian customers. Greff added six bucks to his BYD price target, bringing it to $39/share. Boyd CEO Keith Smith mentioned an expansion of the Fremont Hotel gambling floor on the earnings call, so we’re surprised Greff had no comment on the matter.

* Is Eldorado Resorts CEO Tom Reeg at risk of giving away the Caesars Entertainment store? Evidently in need of some quick cash (he already blew the $500 million he said he was going to save), Reeg is reported to be contemplating sales of the Colosseum and the Caesars Forum conference center. I guess he hasn’t been clued in on the importance of convention business to the Las Vegas Strip. (Unsurprisingly, convention-savvy Las Vegas Sands is said to be nosing around the Forum.) Nothing Reeg has done since taking over at Eldorado has augured well for his eventual stewardship of Caesars and this is par for the course. As for that $500 million in savings, it went bye-bye when Reeg promised Louisiana regulators he would invest in the Pelican State instead.

While on the subject of Sands, Sen. Elizabeth Warren (D) took out an ad in Sheldon Adelson‘s newspaper to attack … Sheldon Adelson. Since Shel ultimately pockets the money from the ad buy we don’t know whether Warren actually came out ahead. Still, it’s nice to see bipartisan faith in good old print media.

* As for Louisiana, it had a modestly good January (one extra weekend day, remember), up 4.5%—encouraging, if less than the gangbusters business being done up in the Rust Belt. The total gross was $196 million. Perhaps the source of greatest optimism was Baton Rouge, where the casinos did 13% better. Well, let’s qualify that: L’Auberge Baton Rouge did hella better, shooting 24.5% higher, to $13 million. By comparison, Casino Rouge ceded 2% to $4 million and Eldorado’s decrepit Belle of Baton Rouge (even its CEO won’t stay there) tumbled 9.5% to $2 million. It’s a good thing to know that Tom Reeg’s honor-bound to put some money back into that place.

In Lake Charles, everybody suffered a bit at the hands of Tilman Fertitta. His Golden Nugget leapt 16% (to $25 million), while L’Auberge Lake Charles was flat at $24 million. Isle Grand Palais fell 8% to $7 million and Delta Downs ceded 5% to $14 million. Everybody prospered in New Orleans, with Harrah’s New Orleans raking in $24.5 million, a 7% gain. Fair Grounds racino galloped 12% ahead to $4 million, Boomtown New Orleans was up a point to $9.5 million, Treasure Chest was up 6% to $9 million and Amelia Belle posted $3.5 million, plus 6%. Shreveport/Bossier City was a mixed bag. With ownership on the way out the door, Eldorado Shreveport declined 5% to $8 million, while Horseshoe Bossier City jumped 10.5% to $14 million. Margaritaville slipped 4.5% to $12 million, Boomtown Bossier ceded 5% to $4 million and Harrah’s Louisiana Downs was ahead 6% to $3.5 million. Biggest gainers were Sam’s Town, up 11.5% to $6 million and Diamond Jack’s, winning back customers and up 13% to $3 million. Every little bit helps.