Macau revenue forcing analysts to upgrade gambling stocks

Jefferies & Co. Analyst David Katz has raised his projection for Wynn Resorts from US$137 to US$141. The change came on the strength of a Las Vegas casino industry that is stabilizing, and revenue at Macau casinos that has amazingly grown by fifty to seventy percent in recent months.

Last year, it looked as though the Macau casinos had hit a wall. Visa restrictions from mainland China were expected to deflate revenue, and some predicted that it would again give power to Las Vegas. Mid-year, however, the restrictions were lifted, and the back half of 2010 saw revenue at the casinos that has never been rivaled in the industry.

Wynn Resorts has experienced a wealth of revenue in Macau, and with a new facility in the area, it only figures to get better for Wynn. Las Vegas Sands CEO Sheldon Adelson risked his fortune when he moved into Macau, but that risk has paid off in a big way, with hundreds of millions of dollars being made by Sands in Macau.

While the analysts are predicting stability because of the Macau casinos, there are others who are concerned over whether or not Las Vegas has really turned the corner. In recent months, Las Vegas casinos have again started to see revenue growth, but the growth is over poor performances from the same periods in 2010.

CityCenter and the Cosmopolitan were being counted on to bring new customers to Sin City, but CityCenter, a joint venture between MGM Mirage and Dubai World, has been a disappointment so far. The Cosmopolitan has not been open long enough to get a good grasp on how it will help other Las Vegas casinos.