Color on Soleil's New Coverage of Casino Stocks: LVS at Buy, MGM, WYNN at Hold

October 1, 2009 11:44 AM EDT

Color on last night's new coverage of Las Vegas Sands (NYSE: LVS), MGM MIRAGE (NYSE: MGM) and Wynn Resorts (Nasdaq: WYNN):

Soleil initiates coverage on:

• Las Vegas Sands - Buy rated, $20 price target. The firm calls Las Vegas Sands a leader in Macau -- leveraged to the "unfolding recovery" in the region. Soleil believes that strength in China will offset weakness in Vegas and that a new casino in Singapore expected in Q1'10 "provides visible growth prospects." With shares of LVS down more than 6% to $15.78 today, the firm's price target represents potential upside of about 27% from current levels.
  
• MGM MIRAGE - Hold rated, $13 price target. Soleil notes that MGM has dodged liquidity issues, but also points out that the casino operator "still faces debt maturities, Vegas capacity growth and a full valuation." According to the firm, MGM trades inline with Las Vegas Sands and at a discount to Wynn on an earnings basis, but based on EBITDA multiple-to-growth, it trades at sharp premiums to the other two top names. MGM shares have tumbled nearly 9% today, most recently trading at $11.
  
• Wynn Resorts - Hold rated, $80 price target. The firm likes that Wynn's Macau IPO was "well received" but is concerned with valuation that appears full at current levels. The stock is down 4.7% to $67.54 today, which represents upside of 18.4% from current levels. Really... a Hold?

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