Macau 2014 Revenue Growth Forecast Reduced to 6.5% at Deutsche Bank (LVS) (MGM) (WYNN) (MPEL)

Deutsche Bank analyst Carlo Santarelli revised his Macau 3Q and 2014 revenue forecast to -0.9% and +6.5%, respectively (prior +3.0% and +8.6%). Comments follow July's 3.6% year-over-year drop in total GGR.

"We are now estimating 3Q14 VIP and mass revenue comparisons of -10.3% and +16.3%, respectively, versus our prior estimates of -8.0% and +23.2%, respectively. Our full year 2014 forecast for mass revenue goes to +24.3% from +27.9% while our VIP revenue forecast goes to -2.6% from - 1.3%. Our 2015 growth forecast is +11.5%, down from +11.6%," said Santarelli.

"We have lowered our August GGR forecast to +0.3% to account for softer VIP volume and mass revenue trends against a tough comparison. Our August estimate is underpinned by a 7.8% y/y decline in VIP revenue, offset by 14.5% y/y growth in mass market revenue. Our 7.8% VIP revenue decline estimate is predicated on a 9.0% y/y decline in VIP rolling chip volume and the LTM hold of 3.12% (excluding direct roll), against a 3.08% hold comp from last August. We note that over the LTM period, VIP hold of 3.12% compares to the prior period LTM hold of 3.22%. Our 9.0% y/y roll decline implies 11% sequential rolling chip volume per day growth from July. We note that the 11% sequential rolling chip volume per day forecast compares to an average daily sequential change of +5.5% over the last four years. Our 14.5% growth expectation for the mass market assumes 16.0% y/y growth in mass table revenue and a 2.3% y/y improvement in slot revenue. Mass table revenue per day in August on a sequential basis is estimated to be up 8.6% relative to July, versus an average over the last four years of +5.1% (+9.8% in 2013)," he added.

Trades are watching Las Vegas Sands (NYSE: LVS), MGM Resorts International (NYSE: MGM), Wynn Resorts Ltd (NASDAQ: WYNN), and Melco Crown Ent. (NASDAQ: MPEL).

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Shares of Las Vegas Sands closed at $71.86 yesterday.

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