Jefferies on Monday upgraded Las Vegas Sands and Wynn Resorts after Macao announced its plan to allow Chinese tour groups back in the casinos as soon as November. The Wall Street firm boosted rating for the casino operators to buy from hold following news that Macau government said that it will resume visitation access from Mainland China through tours and e-visa in a few months. “The moment we’ve been waiting for,” Jefferies analysts led by David Katz said in a note to clients Monday. “We believe several questions remain around the business and our current forecasts already reflect a meaningful recovery, but an upward valuation adjustment for WYNN and LVS is appropriate.” Shares of Wynn Resorts rallied 14% Monday, while Las Vegas Sands also soared a similar amount. Jefferies also lifted the price target for Las Vegas Sands to $50 from $40, Wynn to $75 from $62. Still, the analysts raised the question about the concession renewal process following the reopening. “The most important question is the concession renewal process, which had been expected to be benign until a new entrant submitted an application which was confirmed,” Jefferies analyst said. “Our Mgt. discussions provide little insight into its meaning, which leaves uncertainty until the process is completed.” Meanwhile, risks remained for the duo especially for the longer-term organic growth as the economic outlook is drifting more negative in Macao, the analysts noted. — CNBC’s Michael Bloom contributed reporting.
