Melco Crown falls on Credit Suisse downgrade

Shares of Melco Crown Entertainment Ltd., a developer and owner of casinos and resorts in Macau, fell Monday after a Credit Suisse analyst downgraded the stock to "Neutral" from "Outperform," saying its second-quarter earnings likely would be hurt by an unusually low win percentage.

A casino's win is the percentage the casino won compared with the sum of all wagers made by the players during a period.

Melco shares shed 32 cents, or 4.7 percent, to $6.51. The stock has traded between $5.90 to $19.09 in the past 52 weeks.

Analyst Gabriel Chan expects the company's earnings before interest, taxes, depreciation and amortization to fall 50 percent from the first quarter as its win percentage slips to 2.7 percent, from 3.1 percent.

The company is on track to generate about $HK$50 billion ($6.4 billion US) rolling-chip turnover in July, but win percentage remains low, Chan said.

Chan lowered his target price on the shares to $7.50 from $14.80.

The current share price has already factored in much of the downside from earnings, Chan said, but he said he does not foresee positive news to trigger a re-rating.