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Telsey Advisory Initiates Coverage on Casino Stocks: MGM Resorts International (MGM) and Boyd Gaming Corporation (BYD)

The stocks of MGM Resorts International (NYSE:MGM), Boyd Gaming Corporation (NYSE:BYD), and Churchill Downs, Inc. (NASDAQ:CHDN) are trading up after Telsey Advisory Group initiated coverage on them. MGM Resorts started the day on a higher note, gaining 4.05%, while Boyd Gaming Corporation and Churchill Downs, Inc. are up by 3.42% and 2.55%, respectively. According to a report from CNBC, Telsey has started coverage on these companies with an “Outperform” rating because of the positive movement in the Las Vegas market. However, the research firm maintained a dingy outlook for the Macau region, whose August gaming revenues declined by 35.5% on the year to $2.3 billion. The gaming revenue of the Chinese casino hub has maintained its downward trend for the last 15 months.


MGM Resorts International (NYSE:MGM)’s stock has a consensus price target of $25.28, indicating a premium of almost 20%. The positive sentiment about MGM Resorts International from Telsey appears to be shared by the hedge funds that we follow. At the end of the second quarter, a total of 58 funds held long positions with an aggregate value of $1.74 billion. The total value of their holdings declined 1% in comparison with the first quarter, indicating additional share purchases from ‘hedgies’, as the stock lost 13.22% during the period. Daniel S. Och’s OZ Management and Bain Capital’s Brookside Capital were the top shareholders of the company, holding 11.23 million shares and 11.21 million shares, respectively.

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The stock of Boyd Gaming Corporation (NYSE:BYD) has a short-term price target of $17.94 from nine analysts, with a growth potential of 8% from its current trading price. The smart money held a slightly bearish outlook on the gaming company during the second quarter, as the aggregate value of their holdings was up by only 3.03% on the quarter, amid a 5.28% gain of the stock. The number of hedge funds with long positions improved by one to 29 duriong the second quarter. PAR Capital Management and H Partners Management have large stakes in the company, holding 7.66 million shares and 4.21 million shares, respectively.

Churchill Downs, Inc. (NASDAQ:CHDN) announced a capital project worth $18 million on September 1 for the modernization of its Turf club and other areas of the iconic track. The stock of Churchill Downs has surged by 42.92% since the beginning of the year and it has also gathered interest from hedge funds from our database as heading into the third quarter, a total of 22 investors were long on the stock, an improvement of one from the previous quarter. Moreover, the total value of their holdings jumped by 10.24% on the quarter to $667.04 million. PAR Capital Management held the largest stake in Churchill Downs, Inc. (NASDAQ:CHDN), holding 1.29 million shares followed by Three Bays Capital, with 1.13 million shares.

Disclosure: None

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