The Macau region in China has been the target of many analysts’ downgrades in the casino sector recently, with Sterne Agee the most recent to have cautious views. David Bain was the analyst on the call for this coverage. Despite these negative views, these casino stocks have closed up on Wednesday — and there is a view that the weakness may be an opportunity, as you will see in a quote below.
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Sterne Agee lowered its estimates for 2014 gross gaming revenue in Macau to 0% from the already below consensus number of 3%. It also revised its estimates going forward for the next few years. This revision is expected to eliminate the trend of “Chinese Water Torture” — constant minor downward estimate revisions on the heels of gross gaming revenue disruptive issues.
David Bain said:
We continue to believe those hoping for good news/stability over the next several months will be disappointed — though also believe those investing with a longer-time horizon are presented with a foreword potential ‘look-back moment,’ whereby one can look back a year from now having captured significant gains from current stock levels.
Las Vegas Sands Corp. (NYSE: LVS) had its earnings per share estimates revised down for the 2014 calendar year to $3.49 from $3.52. The 2015 calendar year was revised down to $3.79 from $3.87. The 2016 calendar year was revised down to $4.24 from $4.41. Las Vegas Sands’ price target was moved down as well to $80 from $84. Las Vegas Sands closed the day at $62.88 which was a gain of 2.8% from Tuesday’s close. The consensus price target is $83.30 and the 52-week trading range is $59.52 to $88.28.
Wynn Resorts Ltd. (NASDAQ: WYNN) had its earnings per share estimates revised down for the 2014 calendar year to $8.17 from $8.26, and 2015 calendar year was revised down to $8.96 from $9.24 and 2016 was revised down to $13.13 from $13.40. The price target was moved down as well to $230 from $245. Wynn closed the day at $183.10 which was a gain of 1.8% from Tuesday’s close. Wynn’s consensus price target is $237.89 and the 52-week trading range is $150.08 to $249.31.
Melco Crown Entertainment Ltd. (NASDAQ: MPEL) had its earnings per share estimates revised down for the 2014 calendar year to $1.45 from $1.53. In years ahead, 2015 was revised down to $1.65 from $1.76 and 2016 was revised down to $2.24 from $2.39. This stock’s price target was moved down as well to $50 from $54. Melco closed the day at $26.72 which was a gain of 1.33% from Tuesday’s close, while its consensus price target is $41.47 and the 52-week trading range is $25.58 to $45.70.
MGM Resorts International (NYSE: MGM) had its earnings per share estimates revised down for the 2014 calendar year to $0.50 from $0.51. The 2015 calendar year was revised down to $.53 from $0.54. The 2016 calendar year was revised down to $0.81 from $0.85. The price target was moved down as well to $32 from $33. MGM barely rose on the day to 22.84 only a gain of 0.09% from Tuesday’s close. The consensus price target is $30.83 and the 52-week trading range is $18.40 to $28.75.
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