What happened
Shares of Boyd Gaming (BYD -0.02%) were running almost 10% higher at midday trading on Monday as the prospect for states loosening their coronavirus lockdown restrictions suggested gambling companies could soon see a reprieve.
So what
Casino operators were among the first companies to see their businesses ordered closed as the COVID-19 outbreak turned into a pandemic and officials sought to stem its spread.
Image source: Boyd Gaming.
While Boyd Gaming and others had online operations they could turn to, the cancellation or suspension of all major-league sports play cut off a hugely popular and very lucrative sports betting operation. Boyd Gaming has one of the biggest sportsbooks, and its stock fell from a high of $36 a share in mid-February to around $6 a stub one month later.
Shares have bounded 160% higher since that low point, and an analyst at Nomura Instinet reiterated his buy rating on Boyd, along with industry peer Penn National Gaming.
Now what
As states allow businesses to reopen, including casinos, albeit within social-distancing guidelines and precautions, Nomura's Harry Curtis sees casinos giving preference to their best customers, which he believes "should lift win/position and operating efficiency significantly."
While casinos' revenues will be lower, so will their operating costs, and Curtis sees them returning to profitability by the fourth quarter.
