The Zacks Analyst Blog Highlights: Penn National Gaming, Boyd Gaming And Melco Resorts & Entertainment

For Immediate Release

Chicago, IL – Dec 28, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Penn National Gaming Inc. (NASDAQ:PENN) , Boyd Gaming Corporation (NYSE:BYD) and Melco Resorts & Entertainment Limited (NASDAQ:MLCO) .

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Here are highlights from Wednesday’s Analyst Blog:

Gambling Stock Roundup: PENN, BYD Announce Buyouts, MLCO Launches Hotel Brand

The last week saw gambling industry players Penn National Gaming Inc. and Boyd Gaming Corporation announcing buyouts.

Melco Resorts & Entertainment Limited announced the launch of a luxury hotel brand, NUWA.

Week’s Most Important Stories in Detail

Penn National agreed to buy Pinnacle Entertainment Inc. (PNK) for $1.87 billion in cash and stock. Taking into account Pinnacle Entertainment’s debt, the total value of the deal is $2.8 billion. Pinnacle shareholders will get $20.00 in cash and 0.42 shares of Penn National shares for each Pinnacle share they own. This brings the purchase price to $32.47 per Pinnacle share based on Penn National’s closing price as of Dec 15.

As part of the deal, Penn National agreed to sell Pinnacle's gaming operations in Missouri, Indiana and Ohio to Boyd Gaming Corporation for $575 million in cash. The transaction is anticipated to close in the second half of 2018. The deal is expected to yield $100 million in annual run-rate cost savings within 2 years of closing.

Boyd Gaming announced that it will purchase Valley Forge Casino Resort in King of Prussia, Pennsylvania, from Valley Forge Convention Center Partners, L.P., for $280.5 million cash.

The company looks to leverage on the opportunities that opened up upon Pennsylvania's recent passage of gaming expansion legislation. The acquisition is expected to positively impact Boyd’s free cash flow and be immediately accretive to its earnings.

Melco Resorts announced the launch of a luxury hotel brand, NUWA. Scheduled to be launched in Macau and Manila on Jan 16, 2018, the brand launch is in line with the company’s plan to present phase III of City of Dreams Macau in the second quarter of 2018. The brand will substitute the Crown Towers Hotels, which is slated to expire soon.

With the introduction of NUWA, Melco expects to strengthen its operations in City of Dreams. The company believes that an increase in luxury hotel room inventory will bode well for the property's gaming operations. Further, long-term growth at the property will be driven by the company’s core mission to enhance guest experience.

In the last six months, the price performance of gambling stocks has been impressive. Among the stocks that appreciated the most were Pinnacle Entertainment and Monarch Casino that rallied 65.9% and 48.8%, respectively. Wynn Resorts, Century Casinos, Melco Resorts, Boyd and Penn National Gaming gained 24%, 27.6%, 27.6%, 40.8% and 42.7% respectively in the same time frame.

What’s Next in the Gambling Space?

We note that gambling stocks have oscillated between gains and losses in recent sessions and investors can expect this volatility to continue in the coming days.

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