In a note out Tuesday, Morgan Stanley Research analyst Thomas Allen commented on three large-cap gaming stocks in front of earnings. Allen found the overall industry view as attractive.
MGM Resorts International MGM: Overweight, $25 PT
"Given high financial leverage, we believe MGM is a well positioned play on the Las Vegas recovery and long-term Macau structural growth story. We see numerous drivers that create a realistic bull case."
Wynn Resorts, Limited WYNN: Equal-weight, $143 PT
"We believe WYNN is best positioned to benefit from the supply wave coming to Macau, but near term risks and limited visibility keep us at Equalweight.Expect Wynn Cotai to generate $707m ‘18 EBITDA estimate on a $4.1B project cost, implying a 17% return. We currently reflect $34 / share of equity value for Cotai."
Las Vegas Sands Corp. LVS: Equal-weight, $52 PT
'While LVS continues to be the best positioned for the longer-term Macau "China penetration" / mass market story, the company lacks the near-term catalysts of peers and is most at risk from new competition on Cotai / weaker than expected Macau."
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