Analyst starts Las Vegas Sands at 'Outperform'

Feb 27, 2009 2:12 AM
Staff & Wire Reports |

The launch of casinos in Singapore and Pennsylvania should help put Las Vegas Sands Corp. (LVS) on the road to recovery, an analyst said Thursday as she initiated coverage of the casino operator with an "Outperform" rating.

Janet Brashear of Bernstein Research favors Asian markets over domestic locations, saying in a client note that Singapore may result in $300 million in earnings before interest, taxes, depreciation and amortization for the Marina Bay Sands.

While cognizant of Las Vegas Sands' financial difficulties - the Las Vegas-based company completed an offering of common stock, preferred stock and warrants in November that provided an approximately $2.1 billion capital infusion - Brashear expects the Sands of Bethlehem opening in May in Pennsylvania and the Marina Bay Sands opening next year in Singapore "will be critical catalysts signaling the way out of this crisis."

"There is clearly risk as the company skates at the edge of bank covenants, but we believe the company will find its way out of its liquidity bind and emerge with a stellar portfolio of assets, centered in Asia and including a crown jewel in Singapore," the analyst wrote.

Brashear provided an $8 price target.

Shares of Las Vegas Sands gained 76 cents, or 35.2 percent, to $2.93 in afternoon trading. The stock traded as high as $90.28 a year ago. It hit a 52-week low of $2.13 on Tuesday.

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