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Melco Crown Entertainment Limited Message Board

  • mrtaxx mrtaxx Jan 14, 2013 11:18 AM Flag

    Melco Crown Jumps as Credit Suisse Sees High Rollers Return


    Melco Crown Entertainment Ltd. (MPEL) has gained 1.9% to $19.06 today following a very positive note on the company–and the sector as a whole–from Credit Suisse.

    Like other investment banks, they believe the key is the VIP gambler. Last year’s corruption crackdown sent the so-called high rollers fleeing, and hit Macau’s gambling stocks. But Credit Suisse sees evidence that VIPs are returning. Its analysts write:

    High-roller segment growth is accelerating. The high-roller segment finally resumed positive growth in November 2012, with growth accelerating further in December. More importantly, growth rate of the mass-market segment, particularly the premium-mass segment, remains robust, suggesting that additional junkets’ liquidity has been offered to additional high-rollers.

    As a result, they see gaming revenue jumping by 15.7% in 2013 to $43.8 billion. The Wall Street consensus is lower and analysts will have to boost their earnings estimates for the Macau gambling stocks, creating more upside for the stocks.

    Who will benefit the most? The analysts say Melco Crown has the most upside surprise and is their top pick for the next six months. Sands China, the Macau outpost of Las Vegas Sands (LVS), and Galaxy Entertainment Group–which may not benefit from better earnings in the short-term–to do the best over the next 12 to 18 months.

    They also upgraded MGM China, MGM Resorts International‘s (MGM) China subsidiary, to neutral from outperform because the company has been gaining market share and trades at a discount to its peers.

    Of the major Macau players, only Wynn Resorts’ (WYNN) Wynn Macau didn’t receive the love. Its shares are down 0.1% to $122.83.

    By Ben Levisohn: 1/14/2013

    This topic is deleted.
25.05+0.24(+0.97%)Dec 26 4:00 PMEST

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