A Bank of America/Merrill Lynch analyst raised his rating and share price target on Las Vegas Sands Corp. Monday, saying the casino operator stands to gain from a potential Macau IPO and related financing actions as well as gaming growth taking place in the Chinese enclave.
Shaun Kelley said the removal of Macau visa restrictions has helped pump up mass market volumes in the region, while competition has started to ease. Macau gaming revenue climbed about 17 percent in August.
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"We believe the Macau market is at an inflection point and that Las Vegas Sands represents an ideal way to participate in this strong structural growth story going forward," the analyst wrote in a client note.
Macau is the only place in China where gambling is legal.
In August a subsidiary of the Sheldon Adelson-led Las Vegas Sands filed for a potential IPO with the Hong Kong Stock Exchange. Prior to that, the company reworked a credit agreement in a way that would let it sell a minority interest in its Macau operations to raise cash.
Kelley upgraded Las Vegas Sands to "Buy" from "Neutral" and increased his share price target to $21 from $14.
The company's stock surged $1.17, or 7 percent, to $17.90 in afternoon trading. Over the past year, the shares have traded in a range of $1.38 to $46.87.
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