Nomura Securities on Gaming, Lodging & Leisure: Las Vegas and Lodging Pricing Survey
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Price: $244.06 +1.82%
Rating Summary:
15 Buy, 22 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
Rating Summary:
15 Buy, 22 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
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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."
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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