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Analyst upgrades firm

Monday, June 17, 2002 | 11:26 a.m.

Investment banking firm Lehman Brothers has upgraded Boyd Gaming Corp.'s stock from "buy" to "strong buy" following a selloff that followed a move by the Illinois Legislature to increase riverboat casino taxes to as much as 50 percent of revenues.

While concerns linger about nearby Indiana also increasing casino taxes, "we think the 22 percent decline in Boyd's shares (since May 31) more than fully discounts both the events in Illinois and the current 'worst case' proposal in Indiana," Lehman Bros.' gaming analyst Joyce Minor said.

"In addition, once the Indiana tax question is resolved, we think investors will look to Boyd's bright future, which includes its 50 percent interest in the Borgata, opening in Atlantic City in mid-2003," Minor said.

Gaming stocks typically trade up ahead of major property openings, thus the current weakness in Boyd's stock price represents a buying opportunity, she added.

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