New York (AP) — A JPMorgan analyst reduced some casino operators‘ estimates Monday, partly on a slowdown in Las Vegas spending and Macau revenue growth.
Analyst Joseph Greff said in a client note that Wynn Resorts Ltd. is still well-positioned due to its solid balance sheet, assets and strong project funding, but investors may be nervous about the opening of its Encore resort in Las Vegas later in the year given current economic conditions.
The casino industry, and many other sectors, have struggled as consumers continue to tighten spending due to the ongoing housing downturn, diminishing credit and rising food and gas costs.
Wynn and peer Las Vegas Sands Corp. also face lower-than-expected Las Vegas spending and more modest Macau revenue growth, Greff added.
„We have pushed out the pace of Las Vegas Sands‘ development pipeline in Cotai given the current financing environment and relatively high leverage levels, which we think is prudent at this time,“ he wrote.
Greff lowered some of Wynn’s third-quarter, fourth-quarter and 2009 earnings forecasts and reduced Las Vegas Sands‘ 2008, 2009 and 2010 profit estimates. He kept both companies‘ „Neutral“ ratings.
The analyst also trimmed some estimates for Pinnacle Entertainment Inc., Ameristar Casinos Inc., Boyd Gaming Corp. and MGM Mirage.