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Analyst sentiment on
Las Vegas Sands
and
Wynn Resorts
continues to deteriorate on concerns that the upcoming Macau casino license renewals will be more onerous.
However, stocks of US casino companies with links to Macau were mixed on Friday morning.
Las Vegas Sands
(Ticker: LVS) rose 1% in early trading; Wynn (WYNN) was 0.6%; and
MGM Resorts International
(MGM) up about 1%.
The casino licenses that allow companies to operate in Macau expire next June. Earlier this week, members of the Macau government announced that they were beginning to review the license renewals and review a law that will oversee the deal. The Macau government said in part that it expects the revision of the law to « strengthen » the supervision of the holders of these casino concessions.
With this in mind, Jefferies analyst David Katz on Friday downgraded Las Vegas Sands a Buy on hold down, in part due to the « impending uncertainties surrounding the Macau Concession and its growth and return prospects. » Taxes, investment orders, and local property requirements will be much less favorable.
While Las Vegas Sands and Wynn are both Las Vegas based, in normal times more than half of their income comes from Macau. Macau is the largest gambling market in the world.
In his note on the downgrade of Las Vegas Sands, Katz also cited « the ongoing restrictions from Covid that could continue in a zero tolerance context ».
He already had a hold rating for Wynn, but downgraded its estimates and lowered its price target from $ 104 to $ 83. Katz wrote.
The stock closed at $ 84.37 on Thursday, down about 17% for the week. Las Vegas Sands was around 10%.
MGM Resorts International
,
which has a presence in Macau but is more focused on US real estate, declined about 2% from this week to Thursday.
Analyst sentiment on Las Vegas Sands and Wynn Resorts continues to deteriorate amid concerns that the upcoming renewals of the Macau casino license will be more onerous.
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