Stocks of major casino operators rose Friday after third-quarter results showed better-than-expected gaming revenue from the Chinese gambling enclave of Macau, leading analysts to grow more optimistic.
Sterne, Agee & Leach analyst David Bain raised his rating on Las Vegas Sands Corp. (LVS) to "Buy," saying the upside was "too large to ignore."
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Bain said the company stands to benefit since he thinks it will soon be the biggest casino player in the expanding Asian market. He also sees the potential for big gains in the stock price and liquidity concerns being alleviated by a Hong Kong initial public offering.
Bain said Las Vegas Sands projects in Singapore and Macau put it in position to capture more growth than its rivals in 2011 and 2012.
Meanwhile, Wedbush Morgan analyst Rachael Rothman raised her 2009 and 2010 revenue expectations for the Macau market by 8 percent and 11 percent, respectively, which will help Las Vegas Sands and Wynn Resorts (WYNN).
Rothman maintained an "Underperform" rating on Las Vegas Sands but raised the price target on the stock to $9 from $7. She kept a "Neutral" rating on Wynn's shares but raised the price target to $51 from $47.
Bain of Sterne, Agee & Leach also raised a price target on shares of Melco Crown Entertainment Ltd. (MPEL) to $9.50 and said the company is the most direct beneficiary of growth in Macau among companies listed in the U.S. He has a "Buy" rating on the stock.
Shares of Las Vegas Sands rose 89 cents, or 5.5 percent, to $17.13 in late morning trading.
Wynn shares rose $3.13, or 5 percent, to $65.28.
Melco shares rose 31 cents, or 4.5 percent, to $7.26.
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