Casino stocks tend to rally before a new casino opens, and then deflate afterward. But that might not be the case with Las Vegas Sands’ (LVS) new Cotai hotel, which is expected to open in early April, writes Stifel Nicolaus analyst Steven Wieczynski.
“While we would have been cautious in the past about LVS opening a new property of this magnitude due to their less-than-stellar track record, we believe the company understands the previous mistakes they made (rushing the doors open to recoup initial investment with no concern for details) and have carefully thought out how best to open Cotai Central (in stages)… Bottom line is we think the opening of Cotai Central could be a game changer for LVS. As we look out to 2014, when the whole property will be ramped, we believe Cotai Central and the remainder of LVS� existing Macau assets will account for about 52% of total Macau mass gaming capacity which should put LVS in a unique position relative to its peers.”
Wieczynski raised his price target by $6 to $69, and his 2012/2013 EPS estimates from $2.65/$3.04 to $2.70/$3.19, respectively. LVS was trading 2.6% higher at $59.01 on Monday morning.
Wieczynski also raised his target on MGM International (MGM) to $20 from $18.