Las Vegas Sands Terminates Agreement With Shangri-La, JP Morgan Maintains Overweight Rating

JP Morgan has published a research report on Las Vegas Sands Corporation (NYSE: LVS) after the company's subsidiary terminated its hotel management agreement with Shangri-La.In the report, JP Morgan writes "The termination was reportedly mutually agreed upon between LVS and Shangri-La. We believe that this was likely due to the staggered manner in which the hotel was going to open at year-end and the impact that Shangri La felt this less than complete opening would have on the brand perception, especially if some construction was going on at the hotel. We believe LVS should take these ~1,000 rooms and just brand it with the Venetian and and/or Sands name(s) and self manage it. This would obviously remove any normal conflict between a third party manager and casino player room allocations. The only way not going with a third party global brand makes sense, in our view, would be unless, of course, that having a global brand is something the Macau government really wants. Doing what the Macau government wants makes sense for many obvious reasons. LVS indicated that it has already begun talks with another international hotel brand with a "comparable sales and marketing network and customer base." The WSJ reported this morning that this is Intercontinental Hotels."JP Morgan maintains its Overweight rating and $56 price target.Las Vegas Sands Corporation closed yesterday at $39.03.