The Zacks Analyst Blog Highlights: Wynn Resorts, Las Vegas Sands, MGM Resorts International and Caesar Entertainment
CHICAGO, Dec. 16, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Wynn Resorts Ltd. (Nasdaq:WYNN-Free Report), Las Vegas Sands Corp. (NYSE:LVS-Free Report), MGM Resorts International (NYSE:MGM-Free Report) and Caesar Entertainment Corp. (Nasdaq:CZR-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Monday's Analyst Blog:
Gambling Stock Roundup
As has been for quite some time now, there was no good news for the gambling industry this week as well. Despite winning the lucrative casino license against rival Mohegan Sun in September, problems for Wynn Resorts Ltd. (Nasdaq:WYNN-Free Report) persist. Recently, Somerville, MA filed a lawsuit against the Massachusetts Gaming Commission's decision to grant Wynn Resorts a Boston-area casino license.
Meanwhile, weak Macau gambling revenues in the first week of December and a weak outlook for the rest of the month have led analysts to cut their target prices for casino companies like Las Vegas Sands Corp. (NYSE:LVS-Free Report), MGM Resorts International (NYSE:MGM-Free Report) and Wynn Resorts. These companies earn a better part of revenues from this region.
Therefore, following the news, share price of these companies tumbled. In one other development, Caesar's Entertainment Corp. (Nasdaq:CZR-Free Report) has reportedly reached a tentative deal with senior bondholders on a debt-restructuring plan for its largest unit. (Read earlier week's development: Gambling Stock Round Up for Dec 8, 2014).
Recap of the Week's Important Stories:
1. Macau is once again set to report double-digit decline for the month of December, according to most of the analysts. This would mark the seventh consecutive monthly decline.
This slump reflects a slowdown in Macau as a result of high-stake gamblers curtailing spending amid a cooling Chinese economy. Also, the nationwide crackdown on corruption in China has compelled Macau officials to impose restrictions on high rollers in order to stop billions of dollars from being siphoned off illegally from mainland China to Macau. Meanwhile, the political unrest and pro-democracy demonstrations in Hong Kong are compounding woes.
Per a few analysts, high VIP rollers are unlikely to visit Macau ahead of Chinese President Xi Jinping's visit this month. Jinping has imposed restrictions on the region after it was found that vast sums of money were illegally transferred from mainland China to Macau.
In fact, owing to the weakness in the region, last week, analysts at FBR Capital Markets slashed their target prices for companies which earn a significant portion of their revenues from this region. (Read: Casino Stocks Down After Analysts Slash Target Price)
2. Wynn Resorts is reportedly facing hurdles to build a casino resort worth $1.6 billion at the Everett waterfront for which the company had received license in Sep 2014 from the Massachusetts Gaming Commission. Somerville, MA has recently filed a lawsuit requesting the state court judge to invalidate the license. Per the filing, it stated that regulators should have disqualified the company for license or at least should have abandoned its proposed site after it was found that a convicted felon had a financial interest in the land deal.
Meanwhile, the gaming commission stated that the staff has already investigated on these issues and the land transaction complies with its statutory and regulatory obligations.
Notably, the current lawsuit follows the one made by the city of Revere in October this year claiming that the commission acted arbitrarily and favored Wynn Resorts in comparison to other applicants.
3. Caesar's Entertainment has reportedly reached a tentative deal with senior bondholders on a debt-restructuring plan for its largest unit. This agreement brings the company closer to its plan of putting Caesars Entertainment Operating Co. (CEOC) into bankruptcy protection early next year and converting it into a real-estate investment trust (REIT). A few weeks back, Caesars Entertainment had presented a plan to its creditors to restructure the obligations of its indebted unit. CEOC would be converted into a REIT and divided into two companies. One of the companies will own the casinos and hotels while the other one will rent and manage them.
However, the finalization of the deal is still contingent upon the company reaching an agreement with senior bondholders. The casino operator has been working to seal an agreement with its creditors to put CEOC into Chapter 11 bankruptcy by Jan 15, 2015. The company is trying to convince enough creditors to back the restructuring plan.
4. Las Vegas Sands has appointed Robert G. Goldstein as its president and chief operating officer who will replace Michael A. Leven. After serving the company since 2009, Leven will retire by the end of the year. Besides serving as the president and chief operating officer of The Venetian and Palazzo and as the president of global gaming operations, he has served several other executive positions for the company.
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