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The economy is struggling and Las Vegas we learn is not immune, nor is the Las Vegas Sands Corp, one of the world's largest casino ventures. But with its recent capital infusion and prospects for its upcoming Singapore opening, Wall Street analysts on Monday declared the corporation a "strong buy".
This comes on the heels of news that MGM Grand was likely to announce a $1.2 billion fourth-quarter charge to write off "substantially all" of the goodwill it recognized in the 2005 acquisition of Mandalay Resort Group.
Dennis Forst of KeyBanc Capital Markets said in a client note that MGM's write-down falls in line with his expectation that casino operators will "use the poor 2008 year to take conservative reserves, write down some assets and generally tighten up the balance sheet."
Meanwhile, Jefferies & Co. analyst Lawrence Klatzkin dropped Las Vegas Sands' fourth-quarter estimate to a loss of 5 cents per share from a profit of 8 cents per share and cut his first-quarter forecast in half to 5 cents per share.
But Klatzkin also acknowledged that the Las Vegas Sands is still experiencing strong visitation at the Venetian Macau and will look to gain from its repositioning of the Four Seasons to cater more to Hong Kong VIPs.
"We expect the fourth-quarter opening of Singapore will result in the opening of the most profitable casino in the world," Klatzkin wrote in a note to clients.
Jagajeet Chiba, Gambling911.com
