"Beat-and-raise" quarter for Apple impresses sell side • 7:21 AM
BMO"s Keith Bachman boosts his price target to $600 from $508. He notes gross margin guidance for the December quarter could be viewed as disappointing, but the accounting change (deferred revenue on nearly $1B in hardware sales) could have up to a 100 basis point impact on margins.
Lazard's Edward Parker ups his price target to $610 from $570 . His continues to center his positive outlook on Apple as more of a storage company than electronic company, and says this is the reason margins are sustainable even as competitors close the gap on devices.
Excluding the effect of the accounting change, Apple delivered a "beat-and-raise" quarter, says Susquehanna's Chris Caso, reiterating his Buy and $625 price target.
Baird upgrades to Buy from Hold ... focus turns to 2014, multiple catalysts ahead.
JPMorgan to clients: "The stock should start to break out."
AAPL +0.3% premarket.
Not today Tony, not today......
I think we got plenty of juice left to push us up to $75-$78 near term. LVS Just asking a little breather. Anyone selling here is delusional.
By HOWARD STUTZ
LAS VEGAS BUSINESS PRESS
The Venetian and Palazzo on the Strip provided Las Vegas Sands Corp. with somewhat lackluster revenues in the third quarter.
Wall Street didn’t give the results much attention.
Macau is what drives Las Vegas Sands.
In the three months ended Sept. 30, the company’s four major Macau gaming divisions produced a 43 percent increase in revenues and an 89 percent jump in profits compared with a year ago. The overall net revenues from Macau during the quarter — $2.34 billion — accounted for more than 65 percent of Las Vegas Sands’ companywide total of $3.57 billion.
And it will only continue to grow.
“(Las Vegas Sands) remains predominantly a China secular-driven story,” Macquarie Securities gaming analyst Chad Beynon said. “In our view, Las Vegas Sands remains the best Asian gaming growth and cash flow investment story.”
Beynon wasn’t alone in that thought.
JP Morgan gaming analyst Joe Greff said the Macau market — which many analysts predict will surpass a single-month gaming revenue record when October concludes — shows no signs of slowing.
“We continue to like the Macau gaming sector overall, driven by attractive marketwide revenue growth, particularly in the mass gaming segment,” Greff said. “Las Vegas Sands’ hotel room base should allow (the company) to grow top line and (cash flows) in excess of the market participants.”
Las Vegas Sands is spending $2.7 billion to build a 3,000-room Parisian-themed hotel-casino on Macau’s Cotai Strip region. The development is expected to open by the end of 2015.
Analysts said the property would complement the company’s existing Venetian Macau, the multiple-hotel Sands Cotai Central development, the Four Seasons Macau and the Sands Macau, which is in the peninsula area.
During an Oct. 17 conference call with analysts and investors, Rob Goldstein, Las Vegas Sands’ president of global gaming operations, said visitation from mainland Chinese residents outside Macau’s neighboring Guangdong province had increased, which provides additional revenues beyond the gaming tables.
“With our room base, that’s a very positive thing for us,” Goldstein said. “They stay longer, come from further away and require sleeping rooms. So Sheldon’s (Adelson) 9,000 sleeping rooms in Cotai turned out to be a pretty good idea.”
Adelson, Las Vegas Sands’ 80-year-old chairman and CEO, told investors the company will be the largest benefactor of infrastructure improvements that are bringing more visitors into Macau from both mainland China and through Hong Kong. The opening of the $10 billion Hong Kong-Macau-Zhuhai Bridge in 2016 will slice the drive time it takes for visitors to reach Macau by 40 minutes.
Susquehanna International Group gaming analyst Rachael Rothman said the increases in visitation from several regions of mainland China is “an important inflection that underscores the importance of the infrastructure build-out in greater China that continues to increase Macau’s reach.”
In Las Vegas, The Venetian and Palazzo said casino revenues during the third quarter fell 2 percent, largely because of decreased baccarat play. The resorts’ 7,000 hotel rooms provided a 5 percent rise in revenues while food- and-beverage sales jumped more than 22 percent. Overall, revenues for the company’s Strip market increased 2.9 percent.
Union Gaming Group Managing Director Bill Lerner said reliance on convention business from the Sands Expo and Convention Center during the quarter caused table game wagering to decrease in the casino.
“The higher percentage of rooms to conventioneers versus casino players likely weighed on table games play,” Lerner said. “In addition, there seems be less clarity on when large players come into town.”
The company’s success in Macau leads many analysts to believe Las Vegas Sands would be a leading candidate should Japan open up to gaming. The country was awarded the 2020 Summer Olympics and tax revenues from casinos could fund the building of Olympic venues.
Las Vegas Sands President Michael Leven said estimates peg Japan as a $6 billion-a-year gaming market, which would equal annual revenues from the Strip. Macau produced an industry-high $38 billion in gaming revenues in 2012 and the market is up 17 percent through September.
“Japan would obviously be the most expensive investment we’ve ever made from a single-property standpoint,” Leven said.
How comfortable is Las Vegas Sands in its current financial position? The company hasn’t had a permanent chief financial officer since Kenneth Kay departed at the end of July. When asked about a replacement, Leven said a formal search for a new CFO has not commenced and probably won’t until early 2014.
“We’re moving along the same way we’ve been organized for the last four months,” Leven said.
Think we got em all nailed Armageddon...........
Here are a few In no specific order
Share Buy Backs
Good Hold in Macau and Spore
Increasing Macau Visitation
Improvement to Macau infrastructure, bridges , ferries and borde entry terminals
Lower Debt Burden
Sheldon not #$%$ off the POTUS
Parisian Macau opening
Exemplary utilization of allocated tables in Macau to fit VIP vs Premium mass profile
Continued China economic growth and stabilization
Sentiment: Strong Buy
Politicians in Japan have drafted legislation that would allow casinos to operate in the country, and they could open just before the Tokyo 2020 Olympic Games, reports Bloomberg.
A formal bill could be introduced in parliament before the end of the year in the Diet session, which ends Dec. 6, 2013, according to a Thursday research note from Swiss bank UBS AG (VTX:UBSN).
One important discovery is that casinos could be allowed to operate in both rural and urban areas, whereas before some thought they’d only receive city licenses. The draft document didn’t specify where casinos might be built, though Tokyo and Osaka have been floated as options in the past.
Japanese Chief Cabinet Secretary Yoshihide Suga told reporters in Tokyo, “There are great hopes as regards casinos from the point of view of building up tourism.”
Golden Week Gambling Could Help Set Macau Revenue Record
Global Gambling Market Shows Mixed Signals
UBS analysts called the recent Tokyo pick a “positive catalyst,” writing that Japan’s gambling market could be modelled after nearby Singapore.
Citigroup (NYSE:C) casino analysts earlier pegged Japan’s gambling market as worth a potential $15 billion in annual revenues, twice Las Vegas’ revenues and second in the world only to Macau. Major casino players who could eventually benefit include Las Vegas Sands Corp. (NYSE:LVS), Wynn Resorts, Limited (NASDAQ:WYNN) and MGM Resorts International (NYSE:MGM).
UBS and Citigroup both gave Las Vegas Sands the best odds to open Japan's first casinos. The company’s recent solid financials and strong Asian track record in Macau and Singapore give it the edge, they said. UBS upped its stock price target last week to $78 from $68 after strong third-quarter earnings.
There may be no rush among investors or markets just yet, since it will probably be 2018 before the first casinos open. Gaming companies like Sega Sammy Holdings Inc. (TYO:6460) are also likely to benefit.
Casinos are now illegal in Japan, tho
Me too bro, me too.....It's so awesome when you get on a serious roll and I have been smokin' hot since I got back from Kenya August 23rd.
Looking for the next rotation...........Congrats on making $$$
I know I needed it......real bad....
Today was sick..............
Wish I took a shot at AMZN, but wussed out. Still happy as a clam.
No it won't................The negative energy needs to stop my friend.......it's all good from the valley to the hood!!!
LVS is en FUEGO!!!
Agreed............I used it as another buying opportunity. Just got some NFLX after hours too. Selloff too severe.
Relax people. just the news from China tightening their controls on money and border entries. This too will pass and quickly. Much ado about nothing.
Wouldn't sweat it bro!!!!!
All of our research shows more upside to gaming revenues in Macau for years to come.
Don't believe the noise!!!