DBS cut BYD target price to HK$150 from HK$164

DBS cut BYD target price to HK$150 from HK$164

July 02, 2025 - DBS Bank has recently reduced its target price for Boyd Gaming (BYD) shares to HK$150 from HK$164, reflecting a cautious stance on the company's recent earnings and analyst upgrades. This decision comes amidst mixed signals from the market, with Boyd Gaming's stock experiencing volatility due to both positive and negative earnings reports.

Boyd Gaming's stock has been a subject of interest following its recent upgrade to a Zacks Rank #1 (Strong Buy) [1]. This upgrade was driven by an upward trend in earnings estimates, which has been a powerful force impacting stock prices. The Zacks rating system, which relies solely on a company's changing earnings picture, has an impressive track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988.

However, Boyd Gaming's earnings reports have been mixed. In its latest earnings report, the company reported weaker-than-expected earnings, with a narrower profit margin. The EV maker's Q2 gross profit margin was 16.3%, the lowest level since Q3 2022, due to increased competition and restrictions on promoting autonomous driving technology [2]. Despite this, analysts remain confident about Boyd Gaming's overseas business, with Q2 overseas wholesale volumes more than doubling year-on-year.

Historically, BYD's stock has shown a nuanced response to earnings misses, with short-term investors benefiting from a 66.67% win rate over 3 and 10 days, though this declines to 33.33% over 30 days. This suggests that while transient market reactions may favor quick exits, prolonged holding periods carry elevated risks following such events.

Analysts have raised their estimates for Boyd Gaming across all time frames since the earnings report. For the current quarter, estimates have been lifted from $1.46 to $1.55, a 6% increase. For the current year, estimates have been raised 6%, from $6.49 to $6.89. Looking at the big picture, estimates have been lifted from $6.73 to $7.59, a 13% increase [3].

Despite the challenges, Boyd Gaming's strong earnings momentum, a healthier balance sheet post-FanDuel sale, and a robust development pipeline position the company for continued growth into 2026 and beyond. The combination of rising analyst estimates, strong shareholder returns, and technical strength at all-time highs makes the stock a compelling name for investors seeking exposure to the gaming sector [4].

The reduction in the target price by DBS Bank reflects a more cautious view of Boyd Gaming's prospects in the near term, despite the positive earnings estimates and the recent Zacks Rank upgrade. Investors should closely monitor Boyd Gaming's earnings reports and analyst upgrades to make informed investment decisions, balancing short-term volatility with long-term fundamentals.

References:
[1] https://www.nasdaq.com/articles/all-you-need-know-about-boyd-byd-rating-upgrade-strong-buy
[2] https://www.ainvest.com/news/byd-shares-plummet-weaker-expected-earnings-narrowing-profit-margin-2509/
[3] https://www.euromonitor.com/article/bmw-byd-tesla-and-vinfast-are-recalibrating-their-ev-strategies
[4] https://www.nasdaq.com/articles/bull-day-boyd-gaming-byd