Melco Crown Enter. (MPEL) Bullish Stance Reiterated at Janney Capital

Janney Capital analyst analyst Brian McGill reiterated a Buy rating and $50 price target on Melco Crown Enter. (NASDAQ: MPEL) saying valuation and long-term story remain compelling.

McGill commented, "MPEL reported 1Q14 revenue of $1.36 bln and adjusted EBITDA of $358.7 mln. This compared to expectations for $1.15 bln and $360 mln. While results were in-line with expectations, we thought this was a strong quarter with property EBITDA up 31% YoY and 26% on a luck adjusted basis. Mass revenues were once again a major driver. Despite recent headlines suggesting challenges for the VIP and mass segments in Macau, our long term view on the market is unchanged. We believe growth will be driven by a supply and demand imbalance in addition to improved infrastructure. For MPEL, in particular, its mass market focus should allow continued margin expansion. The company is also scheduled to open Studio City in mid- 2015. We think this property is worth $8 to the stock today. Also in the pipeline is COD Mainla, which is set open later this year, and the fifth hotel tower at COD which should be completed in 2017. Due to uncertainty surrounding the Manila opening, we do not factor it into our valuation. The stock currently trades at only 8x FY14 excluding the Studio City project which we view as attractive. We have updated our model for these results. Our fair value remains $50 which is 14x our FY14 EBITDA plus $8 for Studio City."

For an analyst ratings summary and ratings history on Melco Crown Enter. click here. For more ratings news on Melco Crown Enter. click here.

Shares of Melco Crown Enter. closed at $33.50 yesterday.

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