Friday, March 25, 2011

JPMorgan (JPM) Maintains Sands (LVS) Rating

A subsidiary of Las Vegas Sands (NYSE: LVS) ended its agreement with Shangri-La concerning hotel management while JPMorgan (NYSE:JPM) said they still maintain an "Overweight" rating on the gaming company.

JP Morgan wrote, "The termination was reportedly mutually agreed upon between LVS and Shangri-La. We believe that this was likely due to the staggered manner in which the hotel was going to open at year-end and the impact that Shangri La felt this less than complete opening would have on the brand perception, especially if some construction was going on at the hotel. We believe LVS should take these 1,000 rooms and just brand it with the Venetian and and/or Sands name(s) and self manage it. This would obviously remove any normal conflict between a third party manager and casino player room allocations. The only way not going with a third party global brand makes sense, in our view, would be unless, of course, that having a global brand is something the Macau government really wants. Doing what the Macau government wants makes sense for many obvious reasons. LVS indicated that it has already begun talks with another international hotel brand with a "comparable sales and marketing network and customer base."

BMO raised their 2011 EPS estimates from $1.73 to $1.92 and maintained an Outperform rating on the shares.

Las Vegas Sands closed Thursday at $41.94, gaining $2.91, or 7.46 percent.

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