Macau Gaming Stocks Hit as Macau Looks at Fourth Straight Monthly Decline (MGM) (LVS) (WYNN) (MPEL)

As noted moments ago, Macau gaming stocks like MGM (NYSE: MGM), Las Vegas Sands (NYSE: LVS), Wynn Resorts Ltd (NASDAQ: WYNN), and Melco Crown (NASDAQ: MPEL) are under early pressure. Analysts at FBR Capital suggest this is related to the fact that Macau looks to be on track for a fourth straight monthly decline in Sept. and the first quarterly decline in years.

Highlights: 1) At the halfway point, Sept. looks to be tracking towards a mid-teens decline, 2) At that level, market win would be down ~8% for 3Q, 3) Assuming a 2H14 market decline of ~5% and 2015 growth of 4% would imply 5-7% EBITDA estimate risk for LVS & WYNN (~3% for MGM).

Analyst Jake Fuller said while now might night be the right time to buy, valuations look interesting. "Of course the stocks have sold off sharply, so is it time to step in? Maybe not until we have visibility on a bottom, but valuations are reaching levels that are increasingly interesting to us," he said.

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