Vegas October Gaming Revenue Results Look Concerning, Wedbush Cuts Estimates on BYD, WYNN, LVS, MGM

December 11, 2009 11:29 AM EST
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With data on casino & gaming revenue for the month of October just out, analysts at Wedbush are adjusting Q4, FY09 and FY10 estimates for Las Vegas and the related stocks.

The figures show that total gaming volume in Vegas fell 4.7% from October '08 to this year, but on a two-year basis, volume fell to the worst level this year, down 23.9%. Wedbush attributed the only-modest drop to "strong high-end baccarat play" (up 43.5% year-over-year), offsetting weakness in other table games (down 9.2%) and slots (down 10.4%). Also on the data front, visitations to Vegas improved in October, up 3.7% from the same month last year, however, revPAR fell 15.2%.

Wedbush said "these markets remain challenged as Las Vegas median home values continue to wallow in the $140,000 range, of 56% from their $315,000 peak in 2006. Furthermore, Las Vegas unemployment was 3% in October, 360bps above the national average..."

For the overall Las Vegas market, the firm cut its Q4 gaming win estimate by 2.6% to $1.29 billion and its FY10 estimate by 0.7% to $5.41 billion. These levels represent year-over-year growth of 2.5% for Q4 and 6.7% for the year.

Taking a look at some stocks:
  • Boyd Gaming (NYSE: BYD) - Neutral rated with a $9 target. The firm's Q4 sales and EPS estimates move from $407 million and $0.14 to $392 million and $0.11, respectively. Sales for FY09 move from $1.66 billion to $1.65 billion, and EPS move from $0.50 to $0.47. Finally, for FY10, sales and EPS estimates lowered from $1.69 billion and $0.75 to $1.65 billion and $0.66, respectively. Shares of Boyd are up 0.5% to $8.18 today.
  • Wynn Resorts (Nasdaq: WYNN) - Neutral, $54 target. Q4: sales down from $811 million to $807 million, EPS from $0.15 to $0.12; FY09: sales fall from $3.048 billion to $3.043 billion, EPS from $0.33 to $0.30; FY10: sales cut from $3.384 billion to $3.379 billion, EPS down from $0.51 to $0.50. Wynn's stock is up 1.3% to $62.60 today.
  • Las Vegas Sands (NYSE: LVS) - Underperform, $13 target. Q4: sales estimate falls from $1.262 billion to $1.257 billion, EPS from ($0.08) to ($0.09); FY09: sales down from $4.541 billion to $4.536 billion, EPS unchanged at ($0.25); FY10: sales cut from $5.8 billion to $5.796 billion, EPS unchanged at $0.05. Shares of Las Vegas Sands are up 2% to $15.40 today.
  • MGM (NYSE: MGM) - Underperform, $7 target. Q4: sales down from $1.509 billion to $1.488 billion, EPS cut from $0.01 to ($0.04); FY09: sales from $6.035 billion to $6.015 billion, EPS from ($0.15) to ($0.22); FY10: sales lowered from $5.793 billion to $5.773 billion, EPS from ($0.49) to ($0.63). MGM Mirage shares have rallied 3% today, most recently trading at $9.95.

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