Nomura Securities on Americas Gaming and Lodging: Q2 Gaming Preview on LVS, MGM & WYNN

July 13, 2012 8:12 AM EDT
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Nomura Securities on Americas Gaming and Lodging: Q2 Gaming Preview

Analyst, Harry C. Curtis, said, "Mass remains the growth driver. We are more confident in our 20-25% growth estimate for the next six quarters given its lower base of revenues and the market’s infrastructure improvements opening by year-end (Our estimate is in line with Nomura’s House view of +20%). In early June, we reduced our VIP growth forecast to 7% (which differs from Nomura’s House view of +14.5%). We think VIP could still be at risk. Las Vegas Sands (NYSE: LVS): Reported Macau EBITDA should be in a range of $440m-$550m; but adjusted for low hold, EBITDA of $480m is likely. Wynn Resorts (Nasdaq: WYNN): While Q2 roll declined ~6% YOY, we believe table hold was also light. Reported EBITDA should come in ~$285m vs. our admittedly high $307m est.; but on a hold-adjusted basis, $290m-$295m is reasonable. MGM (NYSE: MGM): We are slightly ahead of MGM Las Vegas estimates ($308m v. $295) owing to our more positive outlook for over 5% RevPAR growth in the quarter. All three stocks have retreated more than 30% from their highs and now are valued at what we believe are compelling multiples of earnings, EBITDA, and free cash."

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