Nomura Securities on Gaming, Lodging & Leisure: Las Vegas and Lodging Pricing Survey
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Price: $42.83 +0.14%
Rating Summary:
15 Buy, 9 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 19 | Down: 21 | New: 29
Rating Summary:
15 Buy, 9 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 19 | Down: 21 | New: 29
Trade MAR Now!
Nomura Securities on Gaming, Lodging & Leisure by Harry Curtis
Curtis said,"An analysis of operating and financial leverage differences and recent outperformance of management/franchise stocks - Recently, the less leveraged, less cyclical business models have begun outperforming. As long as fears of low/no growth persist, we would expect this divergence to continue. In the last two weeks, Marriott (NYSE: MAR), Carnival (NYSE: CCL), Choice (NYSE: CHH) (and oddly MGM (NYSE: MGM)) have outperformed their peers as investors reduce portfolio beta. When signs of economic recovery re-emerge, then the owner/operators should show relative strength. MAR, LVS, MGM remain our Top Picks. MAR and Las Vegas Sands (NYSE: LVS) share the advantages of low leverage, high free cash, and lower cyclicality."
"Las Vegas and Lodging Pricing Survey - Las Vegas pricing continues to show strength through November. Q311 is running at 8.5% YOY growth, above our 5% (ex. resort fees) estimate for MGM, which implies ~$12M upside potential to our Q3 MGM company-wide net EBITDA of $462M. Lodging trends are also higher, with November pricing up 5.4% YOY. We are encouraged by the continued strength in pricing, however, we note lodging demand, particularly group and convention, is a lagging indicator. Reiterate Buy on MAR (PT $35), LVS (PT $58) and MGM (PT $20). We highlight MAR and LVS as they share the advantages of low leverage, high free cash and lower cyclicality."
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Curtis said,"An analysis of operating and financial leverage differences and recent outperformance of management/franchise stocks - Recently, the less leveraged, less cyclical business models have begun outperforming. As long as fears of low/no growth persist, we would expect this divergence to continue. In the last two weeks, Marriott (NYSE: MAR), Carnival (NYSE: CCL), Choice (NYSE: CHH) (and oddly MGM (NYSE: MGM)) have outperformed their peers as investors reduce portfolio beta. When signs of economic recovery re-emerge, then the owner/operators should show relative strength. MAR, LVS, MGM remain our Top Picks. MAR and Las Vegas Sands (NYSE: LVS) share the advantages of low leverage, high free cash, and lower cyclicality."
"Las Vegas and Lodging Pricing Survey - Las Vegas pricing continues to show strength through November. Q311 is running at 8.5% YOY growth, above our 5% (ex. resort fees) estimate for MGM, which implies ~$12M upside potential to our Q3 MGM company-wide net EBITDA of $462M. Lodging trends are also higher, with November pricing up 5.4% YOY. We are encouraged by the continued strength in pricing, however, we note lodging demand, particularly group and convention, is a lagging indicator. Reiterate Buy on MAR (PT $35), LVS (PT $58) and MGM (PT $20). We highlight MAR and LVS as they share the advantages of low leverage, high free cash and lower cyclicality."
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