UPDATE: Morgan Stanley Upgrades Boyd Gaming to Overweight, Awaiting US Online Gaming Expansion

In a report published Thursday, Morgan Stanley analyst Thomas Allen upgraded the rating on Boyd Gaming Corporation BYD from Equal-Weight to Overweight, and raised the price target from $7.00 to $12.00. In the report, Allen noted, “We believe once NJ or NV open up online gaming by late '13 / early '14, it will release a floodgate of 1) investor interest in the online space, and 2) spur new states to open to reap tax dollars. We expect online gaming to then help transition domestic gaming from a secular maturing industry to a secular grower, shifting sentiment along the way. In our base case, we continue to model low onground US gaming growth but an incremental ~$670m legal US online gaming market in ‘14, increasing to ~$9B in ‘20.” Boyd Gaming Corporation closed on Wednesday at $8.20.