Cash, capex cycles and catalysts in focus; Initiate on PENN and RRR at Buy; BYD at Neutral

Research evidence excerpt

Cash, capex cycles and catalysts in focus; Initiate on PENN and RRR at Buy; BYD at Neutral

Equity Research

26 June 2026 | 3:11AM EDT

AMERICAS GAMING

Cash, capex cycles and catalysts in focus; Initiate on PENN and RRR at

Buy; BYD at Neutral

We initiate coverage of Gaming stocks BYD, PENN and RRR Lizzie Dove +1(212)902-0097 | lizzie.dove@gs.com

We initiate coverage of Gaming stocks with Buy ratings on Penn Entertainment Goldman Sachs & Co. LLC

(PENN) and Red Rock Resorts (RRR) and a Neutral rating on Boyd Gaming Corp. Joey Gaebler

+1(212)902-4695 |

(BYD). We believe the regional gaming sector is in the midst of a resurgence, with joseph.gaebler@gs.com

Goldman Sachs & Co. LLC

M&A activity putting a floor under valuation and earnings revisions now offering the

Ryan Davispotential to move higher, after 2025 was characterized by ongoing estimate cuts +1(212)357-5252 |

almost across the board for the industry as a whole. In our view, recent M&A interest ryan.m.davis@gs.comGoldman Sachs & Co. LLC

in MGM and CZR provide evidence of longer duration investors stepping up to Nina Flinn

capitalize on companies with strong FCF generation, the ability to rapidly delever and +1(212)902-7295Goldman Sachs & Co.| nina.flinn@gs.comLLC

favorable relative valuations, with positive read-throughs for PENN (an OpCo), and to

a lesser extent Majority WholeCos/WholeCos BYD and RRR (although it remains to

be seen whether the bid will extend to Majority WholeCos/WholeCos/ as well).

Adding to that, we believe regional gaming trends are at an inflection point with

much of the new-supply headwinds now in the rear view, with Las Vegas Locals (LVL)

trends set up for a better 2027, after 2026 has been more of an investment and

transition year, hampered by disruption headwinds.

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