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Analyst Thinks Las Vegas Sands, MGM Resorts, and Wynn Resorts Have Run Far Enough

By Rich Duprey – May 28, 2020 at 9:49AM

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Having rebounded sharply from their collapse, these casinos have come as far as they can, UBS says.

Although the Big Three casinos are getting ready to open for business again in Las Vegas, Wall Street is urging caution and tempering investor expectations. 

UBS analyst Robin Farley reiterated her neutral position on Las Vegas Sands (LVS -0.10%), MGM Resorts (MGM), and Wynn Resorts (WYNN -0.05%) while simultaneously lowering her price targets for all three gambling halls.

Las Vegas Strip at night

Image source: Getty Images.

As good as it gets

Nevada Gov. Steve Sisolak announced yesterday that he set a June 4 reopening date for the casino industry, but as the stocks of the industry giants have roared back after collapsing under the weight of the coronavirus pandemic, Farley thinks it's time to apply the brakes.

Sands has been the laggard of the trio, with its shares losing only about half their value during the pandemic, but also climbing the least since the rebound began. With the casino up 53% from the bottom, and trading at just under $51 a share, Farley doesn't see much upside, and she cut her price target from $64 to $54 per share.

MGM, on the other hand, has been the most dramatic performer, losing over 80% of its value, but then tripling in value to $18 per share. That's where Farley has set her price target, down from $35 a share.

Finally, where Wynn lost three quarters of its value, it has since risen over 140% to $87 a stub. The UBS analyst says that's too high, and targets shares at $77 each, down from $118.

While there are differences in the markets, business didn't rebound in China for the casinos when they reopened, and they likely won't see a V-shaped recovery in Las Vegas either.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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