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JPMorgan Sees Vegas Strip Room Rates Tracking Up 8% For Q1

JPMorgan Sees Vegas Strip Room Rates Tracking Up 8% For Q1

JPMorgan recently highlighted that Las Vegas strip room rates tracking is up 8 percent for Q1 with major casino operators such as MGM Resorts International (NYSE: MGM), Las Vegas Sands Corp. (NYSE: LVS), Caesars Entertainment Corp (NASDAQ: CZR) and Wynn Resorts, Limited (NASDAQ: WYNN).

Joseph Greff, Managing Director in the Equity Research Department at JP Morgan, commented that of the major gaming stocks surveyed, Caesar's and Las Vegas Sands aggregate room rates look the best.

According to the survey, for 1Q16E, MGM's room rates appear to be flat, CZR's room rates appear to be up 17 percent, WYNN's room rates appear to be up 9 percent, and LVS's room rates appear to be up 13 percent.

This year may have witnessed significant declines for casino stocks, but looking forward, JP Morgan's survey out to the end of 1Q16 indicates that weekday rates appear to be up 8 percent, with weekend rates appearing to be up 7 percent, and up 8 percent overall on a pro forma basis for 1Q16.

Free and Independent Travel (FIT) average daily room rate (ADR) on the Strip was down 3 percent ($252 this period versus $261 the comparable period last year), for the surveyed weekly period. Weekday rates also dropped 3 percent and weekend rates fell 4 percent. The summary: Prior-year comparisons gained 64 percent overall, up 84 percent for the weekday, and up 18 percent for the weekend.

JPMorgan released its weekly Vegas Strip Room Rate Survey on Monday for the week of January 17, 2016 to January 23, 2016 (Period 4 of 2016), as well as their surveyed rates for the 1Q16TD and 1Q16E.

Latest Ratings for CZR

Oct 2020Morgan StanleyMaintainsOverweight
Sep 2020Deutsche BankMaintainsBuy
Sep 2020Goldman SachsInitiates Coverage OnNeutral

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