UPDATE: Citigroup Reduces PT to $21 on Melco Crown Following Q2 Results
Citigroup reiterated its Buy rating on Melco Crown (NASDAQ: MPEL) but lowered its price target from $22 to $21.
Citigroup said, "At just 6.6x 2013E EV/EBITDA estimates, MPEL is the cheapest name in the Macau gaming space (~26% discount to the Macau average of 8.9x). Moreover, we believe the market has yet to really price in the Studio City project or its recently announced deal in the Philippines (still under negotiation). On our estimates, Studio City is worth ~US$2.5bn on an NPV basis (~US$4.60 per MPEL ADS or ~HK$11.90 per HKlisted share). Following 2Q12 results, we have trimmed our TP to US$21 (from US$22) and our FY12-14 estimates by ~2-10%. MPEL ended 2Q 2012 with a net debt to equity ratio of 15%."
Melco Crown closed at $10.55 on Tuesday.
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