A New York analyst tells investors that Las Vegas Sands Corp. is still a good choice.
Carlo Santarelli of Deutsche Bank’s New York office released a report to investors after the market closed on Wednesday saying the recent decline in the market had more to do with the Macau government’s handling of COVID-19 containment policies than on the review of the gambling laws by the government and the granting of casino licenses, so-called concessions.
Santarelli maintained a “buy” rating on Sands stock in Wednesday’s report.
A Sands spokesperson refused to comment on the analyst’s report.
Sands issued a notice from the Securities and Exchange Commission earlier this month warning that the Chinese government’s border restrictions in July and August contributed to the company’s losses.
A week later, the shares of Sands, Wynn Resorts Ltd. fell. and MGM Resorts International, which have all of the resort holdings in Macau, responded to news that the Macau government was reviewing concessions and the gambling law. Sands, Wynn and MGM shares fell 9.8 percent, 10.9 percent and 3.9 percent respectively on September 14th.
On Wednesday, Las Vegas Sands shares rose 53 cents, or 1.5 percent, to $ 36.12 per share, slightly above the daily average. Wynn’s shares closed $ 2.02, 2.6 percent, to $ 80.79 on Wednesday, with volume slightly above the daily average. MGM shares closed at $ 2.47, 6.1 percent, to $ 43.02 per share, more than double the daily average.
“While (Las Vegas Sands) and Macau-centric stocks in general weren’t the brightest names,” wrote Santarelli, “… we believe the weakness is largely due to the slowly recovering Macau gaming market, given virus containment policies and guidelines the ongoing concerns about the Gambling Act and the licensing process.
Santarelli said “downside risk from current levels should be fairly limited”, although he warned that “the near future could be troubled”.
Roy Smolarz, attorney and international investment banker, agreed that this could be a tough sled ride for investors. He cited the tensions between Beijing and Hong Kong and the unrest there as reasons for believing that the central government in Macau could flex its muscles.
“They have such an opportunity to direct change, and there has been so little reluctance to mandate change in Hong Kong to so many companies there that conventional wisdom has to agree that one element of meaningful change is the way US gambling is accepted. “Macau is imminent,” said Smolarz, managing director of Las Vegas-based RS Global Gaming Finance LLC.
The review journal is owned by the family of Dr. Miriam Adelson, the majority shareholder of Las Vegas Sands Corp.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.
