Melco Crown Entertainment Ltd. MPEL was downgraded from Overweight to Equalweight by Morgan Stanley in a report issued Friday on Hong Kong and Macau gaming.
Morgan Stanley issued a Price Target of $28 for the casino developer and operator.
The firm reported that key value drivers include new casino openings, junkets, and overall market growth. Downside risks included intense competition, regulations, history of poor openings, labor shortages and labor costs.
The report indicated that the firm believed MPEL “has peaked” and any upside from recent renovations is not clear.
The firm’s best bull case scenario projected a potential price of $38 over the next 12 months, with a bear case at $15.70.
Melco Crown Entertainment Ltd. traded at $24.87 Friday morning, up 0.28 percent.
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