For a few years, the non-stop growth of gambling in Macau was a fire lit under the top gaming names on Wall Street. A confluence of rule changes, VIP trends and a host of other issues slowed down the freight train. With most of the firms we cover on Wall Street are finally factoring in some lower Macau property numbers, the top stocks in the business may be screaming buys now.
The team at J.P. Morgan are positive on the new trends, and in a new research report they raise price targets on three of the top four stocks in their coverage universe. Longer term, the J.P. Morgan team finds Macau to possess attractive supply and demand dynamics supported by infrastructure enhancements. In the near term, they do expect the stocks to be volatile and recommend investors to use any market volatility on the downside to start scaling in stock purchases.
Here are the four top gaming stocks to buy at J.P. Morgan now.
Las Vegas Sands Corp. (NYSE: LVS) was hit hard in the recent market, giving investors are very solid entry point. The most of its revenues come from fast-growing Asia, not Las Vegas. Its primary properties are in Macau, where gambling revenues are six to seven times that of Las Vegas overall, and growing much faster.
While the J.P. Morgan team has had to rework their numbers both up and down on certain metrics, they remain positive. Investors are paid a solid 2.7% dividend. J.P. Morgan raises their price target to $91 from $89. The Thomson/First Call price target for the stock is $89.45. Las Vegas Sands closed Tuesday at $75.08 a share.