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Las Vegas Sands (LVS), Wynn Resorts (WYNN) Mentioned Positively at Goldman Sachs

September 10, 2014 9:41 AM EDT
Get Alerts LVS Hot Sheet
Price: $51.70 +0.43%

Rating Summary:
    26 Buy, 12 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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Goldman Sachs see attractive entry points in Las Vegas Sands (NYSE: LVS) and Wynn Resorts Ltd (NASDAQ: WYNN). Commenting on recent weakness, analyst Steven Kent said "times like these create entry points."

"Investor concerns over softer markets in Macau are evident in the recent underperformance of gaming operators LVS and WYNN. Over the past five months LVS and WYNN have declined 22% and 16%, respectively, vs. the broader market (S&P500 +7%). While we acknowledge the near-term weakness and uncertainty, we are encouraged by our new analysis. Not only does it highlight the value proposition in Buy-rated LVS and WYNN, but it shows how even in a relatively weak environment, similar to the 2008/09 period, LVS and WYNN offer significant positives for long-term investors," said Kent.

"To analyze the downside risk, we modeled a bear case scenario based on the very weak 2008/09 trends. Our conclusion: even applying these bear - case assumptions, we’d expect LVS and WYNN to generate significant free cash flow. Even under a depressed scenario the cash flow and existing strong balance sheets will allow for continued dividend payouts and share buybacks To clarify, this scenario is purely hypothetical and does not reflect our published model," he added. "While we recognize the near-term weakness as worrisome, we highlight several significant positives that stand out from our analysis. Namely, though we have seen periods of weakness before (‘05/’06 and 2008/09), the current environment differs in that solid visitation growth has continued and hotel occupancy is at all-time highs. Combined with lowered sell side expectations and current low relative valuation levels we believe LVS and WYNN are now set up for a rebound in performance."

For an analyst ratings summary and ratings history on Las Vegas Sands click here. For more ratings news on Las Vegas Sands click here.

Shares of Las Vegas Sands closed at $62.85 yesterday.



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