Macau Gaming Stocks Weaker (MPEL) (WYNN) (LVS) (MGM)

February 19, 2013 9:49 AM EST Send to a Friend
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Macau gaming stocks are lower Tuesday following negative data points on February VIP gaming revenue.

According to analyst Harry C. Curtis at Nomura, "The first 17 days of February gaming revenues imply ~MOP25-25.5B for the month (or low-to-mid-single-digit % YoY growth vs. our and Street ests between 10%-15%). The average daily table run rate in the past 17 days was HKD820M vs. January’s HKD805M."

He continued, "There could be some pent-up VIP demand, which could lift in the remainder of Feb. If February VIP revs do not pick up post CNY, revs could be down 5-7% YoY. In the last 10 days, US listed gaming stocks have underperformed the S&P 500 and HK listed counter parts moderately. We suspect that some of this profit taking is related to the shares' out performance in Jan. combined with lower-than-expected VIP revs during CNY. We continue to recommend LVS and WYNN, as we believe VIP revenues return to mid-single digit growth rates going forward, and as the much higher margin mass growth continues to outperform."

Related stocks: Las Vegas Sands Corp. (NYSE: LVS) (-3.4%), Wynn Resorts Ltd. (NASDAQ: WYNN) (-3%), Melco Crown Entertainment Limited (NASDAQ: MPEL) (-6%), MGM (NYSE: MGM) (-1%).

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