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5 Takeaways From Wells Fargo's Vegas Room Rate Survey

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5 Takeaways From Wells Fargo's Vegas Room Rate Survey

Wells Fargo has published results of its Las Vegas room rate survey. Following are the five key takeaways from the survey:

1. Wells Fargo still expects 3–5 percent growth in the fourth quarter.

2. New Year's Eve trending down in low-single digits past couple weeks.

3. CES Week rates bullish with rates up nearly 25–30 percent on tough comp.

4. October citywide revenue per available room (RevPAR) grew 2 percent given tough comp.

5. Strength in first quarter 2017 not a singular event.

The survey came ahead of Las Vegas data, which is expected on December 29. Analyst McKnight estimates November Las Vegas Strip gaming revenues to be flattish to down 5 percent year-over-year.

Commentary

For regional gamers, the year-to-date November revenues were down 0.2 percent in line with McKnight’s estimates, while weather and New Year's Eve could be a ''wildcard'' for December results.

The analyst also warned that the first quarter results of regional gamers will be up against a difficult comp (+2.5 percent) on last year's mild winter. The key regional gamers include Penn National Gaming, Inc (NASDAQ: PENN), Pinnacle Entertainment Inc (NASDAQ: PNK), Churchill Downs, Inc. (NASDAQ: CHDN) and Boyd Gaming Corporation (NYSE: BYD).

Meanwhile, gaming stocks underperformed last week, but have outperformed year-to-date. The analyst said gaming stocks under coverage were down 2 percent on the week versus the S&P 500, which was flat on the week. Year-to-date, gaming stocks grew 19 percent, while S&P 500 advanced 11 percent.

Latest Ratings for PENN

DateFirmActionFromTo
Aug 2019UpgradesHoldBuy
May 2019UpgradesEqual-WeightOverweight
Jan 2019UpgradesNeutralBuy

View More Analyst Ratings for PENN
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