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A Closer Look at Boyd’s Newly Added Risk Factors

Boyd Gaming Corp. (BYD) is a casino, hotel, and entertainment company based in Las Vegas, Nevada.

The firm recently delivered strong fourth-quarter earnings results, with revenues climbing by 38.4% year-over-year to $879.8 million. Meanwhile, adjusted profits per share were $1.35, compared to $0.46 over the same quarter the previous year.

In addition, during the earnings call, Boyd Gaming approved the reinstatement of a regular quarterly dividend of $0.15 per share, up from $0.07 earlier, which was stopped in March 2020 due to COVID-19-related difficulties.

Let’s look at the risk factors for Boyd Gaming using the new Tipranks’ Risk Factors tool.

Risk Factors

Boyd Gaming’s main risk categories are Finance & Corporate and Legal & Regulatory, which account for five risks each of the total 18 risks identified. 

The next major Boyd Gaming risk falls under the Macro & Political category, which accounts for four risks.

A recently added risk in this category was explained by the company to be “current and future economic, capital and credit market conditions could adversely affect our ability to service our substantial indebtedness and significant financial commitments or make planned expenditures.”

Boyd Gaming advised investors that it needs to raise capital from the stock market or generate adequate cash flow to service its massive debts and other significant financial obligations like rent payments under lease contracts.

Furthermore, the company notified investors that the COVID-19 pandemic has worsened global economic circumstances and added to financial volatility. Also, the Federal Reserve is projected to hike interest rates in the near future, raising the cost of financing and affecting the company’s operating results.

Given the foregoing concerns, Boyd Gaming cautions investors that the business may be unable to acquire sufficient cash on acceptable terms from the market, and as a result, it may be forced to sell assets or reduce capital expenditures and other investments.

Wall Street’s Take

Turning to Wall Street, the stock has a Moderate Buy consensus rating, based on five Buy and two Hold ratings. The average Boyd Gaming price target of $81.43 implies 16.2% upside potential to current levels.

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