Analysts at FBR Capital Markets issued the latest round of price target cuts for casino operators with heavy exposure to the Macau market. Analysts cited declining Macau gaming revenues in November and the first week of December as justification for the cuts.
The Cuts
FBR cut its price target for Las Vegas Sands Corp LVS 1.12% by $7 per share, lowered its target for MGM Resorts International MGM 4.46% by $5 per share, and dropped its target for Wynn Resorts, Limited WYNN 1.1% by $30 per share. Analysts see the operators falling short of previous price targets after Macau gaming revenue declined 11.7 percent, 23.2 percent and 19.6 percent in September, October, and November, respectively.
The Cause
The gaming environment in Macau has been under a lot of pressure recently. A cooling Chinese economy and a crackdown on illegal currency use in Macau have left many high-rollers leery of the Chinese casinos. Some analysts believe another double-digit revenue decline is coming for Macau in January, as focus in China shifts to the Chinese New Year (January 31-February 19).
Battered Stocks
The stocks of the four major U.S.-listed Macau gaming companies are all down between 11 percent and 40 percent in 2014.
However, FBR analysts aren’t the only ones that believe…
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