Is it Time to Double Down on Gaming Stocks? (BJK) (LVS) (MGM) (WYNN)
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Price: $58.64 +1.17%
Overall Analyst Rating:
BUY (= Flat)
Dividend Yield: 4.7%
Revenue Growth %: +19.6%
Overall Analyst Rating:
BUY (= Flat)
Dividend Yield: 4.7%
Revenue Growth %: +19.6%
Trade LVS Now!
Shares of Las Vegas Sands Corp. (NYSE: LVS) are higher by over 1 percent in early trading on Friday. These are not bad returns on an intraday basis, but in light of a jaw-dropping 35 percent decline in the past 90 days, it leaves much to be desired.
Gaming stocks have hit a bit of a rough batch lately. Market Vectors Gaming ETF (NYSE: BJK) is lower by 15 percent in the past 90 days. After bouncing off lows in June, gaming stocks have rolled over again in July.
Yesterday, Wells Fargo cut its price target on Las Vegas Sands to $35-$47 from a previous target of between $52-61. This is a fairly significant cut, and it did not go unnoticed by investors.
Analyst Cameron McKnight at the bank said, "We are decreasing our estimates and valuation range on slowing Macau growth, a deteriorating Chinese macro environment, a disappointing ramp at Cotai Central, and increased Singapore regulation."
McKnight has a 'Market Perform' rating on Las Vegas Sands, but given the extreme reduction in the price target, it shows a fair amount of pessimism in the stock.
Besides Las Vegas Sands, MGM Resorts International (NYSE: MGM) and Wynn
(Nasdaq: WYNN) are some of the most followed stocks in the sector. All three stocks have retreated more than 30% from their highs, and according to Harry C. Curtis of Nomura securities, each of these stocks are now valued at what he believes are “compelling multiples of earnings, EBITDA, and free cash."
Curtis's call appears reasonable, but given macro headwinds in China and a struggling economy in the U.S., it may turn out to be a gamble investors are unwilling to take.
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Gaming stocks have hit a bit of a rough batch lately. Market Vectors Gaming ETF (NYSE: BJK) is lower by 15 percent in the past 90 days. After bouncing off lows in June, gaming stocks have rolled over again in July.
Yesterday, Wells Fargo cut its price target on Las Vegas Sands to $35-$47 from a previous target of between $52-61. This is a fairly significant cut, and it did not go unnoticed by investors.
Analyst Cameron McKnight at the bank said, "We are decreasing our estimates and valuation range on slowing Macau growth, a deteriorating Chinese macro environment, a disappointing ramp at Cotai Central, and increased Singapore regulation."
McKnight has a 'Market Perform' rating on Las Vegas Sands, but given the extreme reduction in the price target, it shows a fair amount of pessimism in the stock.
Besides Las Vegas Sands, MGM Resorts International (NYSE: MGM) and Wynn
(Nasdaq: WYNN) are some of the most followed stocks in the sector. All three stocks have retreated more than 30% from their highs, and according to Harry C. Curtis of Nomura securities, each of these stocks are now valued at what he believes are “compelling multiples of earnings, EBITDA, and free cash."
Curtis's call appears reasonable, but given macro headwinds in China and a struggling economy in the U.S., it may turn out to be a gamble investors are unwilling to take.
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