Can Boyd (BYD) Run Higher on Rising Earnings Estimates?
Boyd Gaming (BYD) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.
The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this casino operator, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
For Boyd, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year.
The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:
12 Month EPS
Current-Quarter Estimate Revisions
The company is expected to earn $1.42 per share for the current quarter, which represents a year-over-year change of +1.43%.
Over the last 30 days, four estimates have moved higher for Boyd compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 13.05%.
Current-Year Estimate Revisions
The company is expected to earn $5.76 per share for the full year, which represents a change of -5.26% from the prior-year number.
The revisions trend for the current year also appears quite promising for Boyd, with six estimates moving higher over the past month compared to one negative revision. The consensus estimate has also received a boost over this time frame, increasing 6.72%.
Favorable Zacks Rank
The promising estimate revisions have helped Boyd earn a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
Boyd shares have added 16.1% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.
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