After reducing estimates for Wynn Resorts (WYNN) last week, Citi is now cutting estimates on Las Vegas Sands (LVS), Boyd Gaming (BYD), and MGM Mirage (MGM) as well. The bank cites an obvious culprit, the struggling economy:
[We see] weakening fundamentals and increased economic risks. Visibility is low, but we feel that downside risks are building.
Despite the cratering prices of these stocks, Citi needs to see even more weakness before they get off the sidelines:
Although gaming operators have declined 61% YTD, the stocks not hist’ly inexpensive, and our new ’09 EBTIDA estimate are 16% below consensus. That said, much of the bad news appears discounted. We view WYNN as best fundamental story (low relative earnings/execution risk), but shares have out- performed to reflect this (-26% YTD).
Citi reiterates HOLD on WYNN, LVS, BYD, and MGM.
MGM Mirage (MGM) Cut to Sell (Finally) (MGM)
Las Vegas Sands (LVS), WYNN Casinos (WYNN), et al: Worst Yet To Come (LVS, WYNN, MGM)
Gambling Fears Overblown: Las Vegas Sands (LVS), MGM (MGM), and Wynn Resorts (WYNN) Could Double (LVS, MGM, WYNN)
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