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Wells Fargo Lowers The Odds In Macau, Reduces Estimates Amid Weak VIP Growth

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Wells Fargo analyst Cameron McKnight lowered revenue growth estimate on the Macau market following weak VIP growth and World Cup betting.

Macau Market Feels Softening VIP Trend

McKnight cut his 2014 Macau market revenue growth estimate from 11 percent to eight percent year-over-year amid weak VIP growth. The analyst commented that "VIP results have been weakening since April/May due to greater-than-expected softening of macroenvironment."

Wells Fargo added that the underlying VIP trend was also affected by substitution towards betting on the World Cup.

The firm lowered the 2014 second quarter VIP market revenue growth estimate year-over-year from negative one percent to negative nine percent. The mass market estimate remains at 30 percent growth, but could drop to low 20 percent growth in July from the World Cup and smoking ban.

Individual Casino Estimates Slashed 5-10 Percent Below Consensus

Wells Fargo cut Las Vegas Sands (NYSE: LVS) second quarter Macau property EBITDA estimate to $833 million, six percent below consensus.

Wynn Resorts (NASDAQ: WYNN) Q2 property EBITDA was slashed six percent to $330 million, five percent below consensus.

Melco Crown (NASDAQ: MPEL) and MGM Resorts (NYSE: MGM) also saw a cut to its Macau property EBITDA Q2 estimates to $343 million and $212 million, respectively. The new estimates are 10 percent and nine percent below consensus figures.

Latest Ratings for LVS

Apr 2015Deutsche BankMaintainsHold
Apr 2015JP MorganMaintainsOverweight
Mar 2015CLSADowngradesBuyOutperform

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