Las Vegas Sands and Wynn Resorts see double-digit rallies as bull thesis is recharged
Following the blockbuster announcement that the Macau government will resume visitation access from Mainland China through tours and e-visa, Jefferies upgraded both Las Vegas Sands (NYSE:LVS) and Wynn Resorts (WYNN) to a Buy rating after having the casino stocks set at Hold.
Analyst David Katz said it is the moment the firm has been waiting for with Macau, but still has some questions on the near-term set-up.
“The first, most important question is the concession renewal process, which had been expected to be benign until a new entrant submitted an application which was confirmed. Our Mgt. discussions provide little insight into its meaning, which leaves uncertainty until the process is completed. Second, whether the trajectory of recovery will be steep or gradual in the context of the shifting business mix noted above, remains debatable. Third, the longer-term global fundamental outlook for Macau is questionable given the economic outlook which is drifting more negative.”
Still, Katz and team see enough to add incremental multiples to the EBITDA, price-to-earnings and free cash flow estimates that push its view on LVS and WTNN to the bullish side of the ledger.
Shares of Las Vegas Sands (LVS) soared 12.45% in Monday morning trading and Wynn Resorts (WYNN) skied 14.65%.
Read more on the latest developments in Macau.
Quoted from Various Sources
Published for: Ipodifier