Wynn, Las Vegas Sands Upgraded at B of A as Coronavirus Concern Abates

Wynn and Las Vegas Sands are exposed to China through properties in Macau. Bank of America upgraded the casino companies, saying that the growth rates of cases of the coronavirus are leveling off.
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Shares of Wynn Resorts  (WYNN) - Get Report and Las Vegas Sands  (LVS) - Get Report are higher after the casino companies were upgraded by Bank of America analysts as concern about the impact of the coronavirus on their business eases.

Analyst Shaun Kelley says that while cases of the coronavirus continue to grow, the  growth rates of the disease, in China and globally, have been stable or declining for about a week.

As a result, the firm raised Wynn Resorts and Las Vegas Sands to buy from neutral.

He affirmed a price target of $150 a share for Wynn, and he lifted his target for Las Vegas Sands to $80 from $72.

The firm’s base case is that the virus has delayed Macau progress by up to six months. As a result, the firm reduced its first-half 2020 estimates of gross gambling revenue, expecting a 40% to 50% decline in Q1 and a 15% to 20% decline in Q2.

Bank of America is positive on second-half estimates in Macau thanks to four factors:

  • Signs of improving China macro
  • Positive gross gaming revenue inflection
  • Improving policy stance toward Macau
  • Potential news on license renewals

Last week, Macau said it would close its casinos for 15 days, the longest shutdown since western casinos first opened in the region in 2004.

At last check, shares of Wynn Resorts are rising 3.2% to $136.15 while Las Vegas Sands was gaining 1.7% to $70.01.