Las Vegas Sands (LVS) - Get Report was falling Tuesday as shares of the gaming and resort company faced a downgrade from Morgan Stanley and growing concerns over the outbreak of the deadly coronavirus in China.
Analyst Thomas Allen cut his recommendation on Las Vegas Sands to equal-weight from overweight with a price target of $72 a share. The company is scheduled to report fourth-quarter earnings on Tuesday.
The stock declined 4.33% to $70.85 in trading Tuesday.
Las Vegas Sands and Wynn Resorts (WYNN) - Get Report both have extensive operations in Macau, which sparked worries among investors that business could suffer fallout from the spread of the coronavirus. Shares of Wynn were also falling, down 5.6% to $143.09.
Chinese authorities on Tuesday confirmed six deaths in an ongoing virus outbreak in the country, bringing the total number of confirmed cases to more than 300. It was also confirmed that the virus can spread from person-to-person contact.
Outside China, cases have also been confirmed in Thailand, Japan and South Korea, according to the Centers for Disease Control and Prevention.
Bernstein analysts warned that the pneumonia outbreak could have a lasting impact on Macau’s gaming operators.
Fever is a common symptom of the virus and the analysts said that health officials and gaming regulators have been "assisting casino operators with purchasing and installing body temperature detection equipment since early January to strengthen virus prevention and control measures.”
While the impact of the virus has been more muted to date, the analysts warn that "any major spread that begins to disrupt travel would be negative for Macau stocks.”
In addition to casinos, airline shares were also sliding Tuesday, with Delta Airlines (DAL) - Get Report, American Airlines (AAL) - Get Report, and United Airlines (UAL) - Get Report losing ground, following airline stocks listed in Hong Kong, which also took a hit.
Hundreds of millions of Chinese citizens are expected to travel domestically and internationally during the extended Lunar New Year holiday, which starts on Saturday. The annual migration has sparked fears of a further spread of the virus similar to the Severe Acute Respiratory Syndrome (SARS) pandemic in 2002 and 2003 that killed some 800.