Reducing Estimates and Target on Las Vegas Sands, Reiterating Market Weight Rating

6/30 - "A promotional email sent out over the weekend points to a later-than-expected opening at Four Seasons Cotai and our own survey work shows Venetian LV (Las Vegas) discounting heavily in the June-July timeframe. Based on those factors, we are reducing our back half estimates and taking our price target down from $72 to $60. We maintain a Market Weight rating on the stock."

"We received an email from Four Seasons indicating that it will take reservations starting on 10/1 versus the summer 2008 opening] discussed by management as recently as a 6/2 conference presentation. LVS may be planning a soft opening prior to 10/1, but we had modeled a full opening in July and see this as a negative. We are encouraged by (hotel room) rate targets though."

"LVS traded off 32% in June (vs S&P 500 down 9%) and has hit a two year low, but is still valued at 22x our revised 2008 EBITDA estimate and that is well above the industry norm of 9-10x. Aggressive development plans will drive out-year growth and justify a premium, but the potential for multiple compression remains high as investors’ willingness to pay for those as yet unfunded projects wanes. We maintain a favorable view of the company’s operating strategy and growth prospects, but remain on the sidelines with the stock."