This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Casinos Run the Table

Casino stocks have been on a roll, and some investors are betting on continued strong growth in Las Vegas and gains from industry expansion as far afield as China.

But despite the lofty levels, some on Wall Street still think there's room for more gains. Notably, Merrill Lynch's David Anders, who lifted his price targets on shares of Harrah's Entertainment (HET) to $83 from $72 and MGM Mirage (MGG) to $80 from $65.

Those price targets would imply enterprise value-to-EBITDA -- or earnings before interest, taxes, amortization and depreciation -- multiples of 8.6 times for Harrah's and 10.6 times for MGM Mirage, at the high end of historic valuation ranges, wrote Anders in a research note.

Nonetheless, the analyst believes such valuations are warranted. In Harrah's case, the company will enjoy synergies and increased cash flow from its pending acquisition of Caesars Entertainment (CZR - Get Report), as well as long-term growth opportunities in Pennsylvania, the U.K. and Singapore. MGM Mirage, which is in the process of acquiring Mandalay Resort Group (MBG), has "meaningful" growth opportunities in Las Vegas and the U.K., among other places.

Shares of both MGM Mirage and Harrah's established new 52-week highs Friday, with MGM Mirage hitting $69.49 and Harrah's rising as high as $64.90, capping off a week of casino stock buying that lifted the Dow Jones U.S. Gambling Index more than 2% last week. Another big casino stock, casino tycoon Steve Wynn's Wynn Resorts (WYNN - Get Report), gained about 7% over the week.

A new entrant's dazzling debut helped buoy the sector. Las Vegas Sands Corp. (LVS - Get Report) shares soared to almost $50 after the company priced its initial public offering at $29 a share. The IPO price was well above the revised $24-to-$26 target and an earlier range of $20 to $22 a share.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
MBG $27.00 -0.31%
BYD $19.22 3.11%
CZR $7.09 3.81%
LVS $46.75 3.54%
WYNN $94.28 6.77%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs