Vail Resorts and Other Resort and Casino Stocks on a Roll (MPEL, MTN, RCL, VAC)
Colorado-based ski resort operator Vail Resorts (NYSE: MTN) posted a wider-than-expected quarterly net loss early Tuesday due to higher expenses and lower retail sales, pushing the share price down more than 10 percent in morning trading. Still, the share price is more than 39 percent higher year to date. Vail Resorts and competitors Marriott Vacations Worldwide (NYSE: VAC), Melco Crown Entertainment (NASDAQ: MPEL) and Royal Caribbean Cruises (NYSE: RCL) are all on a roll, rising more than 30 percent in the past six months.
Marriott Vacations Worldwide
This seller and manager of vacation properties saw its shares pull back about five percent following a third-quarter in which revenues fell short of consensus estimates, but it has since recovered. The Orlando-based company has a market capitalization near $1.4 billion. Its long-term earnings per share (EPS) growth forecast is about 15 percent, but the return on equity is less than three percent and the price-to-earnings (P/E) ratio is higher than the industry average. Short interest is more than seven percent of the float, but that is the lowest it has been since May. Four of the six analysts surveyed by Thomson/First Call who follow the stock recommend buying shares. Their mean price target, or where they expect the stock to go, represents about 20 percent potential upside and would be a new 52-week high. Over the past six months, the stock has outperformed the likes of Las Vegas Sands (NYSE: LVS) and Carnival (NYSE: CCL), as well as the broader markets.
Melco Crown Entertainment
The share price of this Macau-based resort and casino operator fell more than seven percent in early trading Tuesday, but it is still more than 40 percent higher than six months ago. Gambling revenue in Macau, the world's largest casino market, rose about eight percent year-over-year in November despite increased regulation. The company has a market cap of about $7.8 billion. The long-term EPS growth forecast is almost 37 percent, and the return on equity is less than 14 percent. The P/E ratio is less than the industry average. Of the analysts polled, 18 out of 22 recommend buying shares, though two recommend selling. Analysts believe the shares have some room to run as their mean price target is more than 14 percent higher than the current share price. That would be a level it has not seen since 2008. The stock has outperformed competitors such as Las Vegas Sands and Wynn Resorts (NASDAQ: WYNN), as well as the broader markets, over the past six months.
Royal Caribbean Cruises
Shares of this Miami-based company are trading more than 56 percent higher than six months ago and reached a 52-week high on Monday. The global cruise line operator easily topped consensus EPS estimates in the most recent quarter, and it sports a market cap near $7.6 billion and a dividend yield of about 1.4 percent. Its P/E ratio is less than the industry average. The long-term EPS growth forecast is about 10 percent, but the return on equity is only a little more than five percent. Shares sold short represent about five percent of the float. Some 17 of the 27 analysts surveyed rate the shares at Buy or Strong Buy; none recommend selling. Their mean price target is about nine percent higher than the current share price, and would be a new 52-week high, as well as a level it has not seen since July of 2011. The stock has outperformed competitor Carnival and the broader markets over the past six months.
Vail Resorts not only lost more than analysts expected in a quarter in which it typically posts a net loss, but it also warned that it may come in short of full-year profit expectations. Today's pullback wipes out about three months' worth of gains. The $1.8 billion market cap company is headquartered near Denver and offers a dividend yield near 1.3 percent. Its long-term EPS growth forecast is more than 27 percent. But the return on equity is about two percent and the P/E ratio is higher than the industry average. This morning's results ended a streak of three quarters of better-than-expected earnings results. The mean price target from before this report is about 22 percent higher than the current share price, though that may soon change. Yet over the past six months, the stock has outperformed Wynn Resorts and MGM Resorts (NYSE: MGM), as well as the broader markets.
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