Analyst lowers target price for MGM, Wynn
A Goldman Sachs analyst cut the price targets of Wynn Resorts Ltd. and MGM Mirage, citing challenging market conditions in Las Vegas and Macau.
MGM Mirage not only faces softening demand on the Las Vegas Strip, but liquidity concerns as well, Steven Kent said Monday in a note to clients.
Las Vegas has been battered as consumers continue to curb their discretionary spending due to the prolonged housing downturn, eroding credit, escalating food costs and unemployment concerns.
Adding to the market pressure, last week Las Vegas-based MGM Mirage said in a filing with the Securities and Exchange Commission that it might have to break loan agreements this year unless the economy turns around and more people start to gamble again.
Kent slashed MGM Mirage's price target to $1 from $11. He reduced Wynn's 2009 earnings per share estimate to 29 cents from 57 cents and trimmed his 2010 prediction to 60 cents from 75 cents. He dropped Wynn's price target to $23 from $26 due to the new forecasts.
