Stocks of leading casino operators in Las Vegas took a beating on Oct 2, after at least 59 people lost their lives and more than 500 were wounded in a mass shooting.
On Oct 1, a gunman opened fire on attendees at the Route 91 Harvest Music Festival from the 32nd floor of the Mandalay Bay Resort and Casino.
Consequently, share price of MGM Resorts International (MGM - Free Report) that owns Mandalay Bay declined nearly 6% in yesterday’s trading session.
Shares of Wynn Resorts Ltd. (WYNN - Free Report) and Boyd Gaming Corporation (BYD - Free Report) have also decreased 1.2% and 0.04%, respectively. Meanwhile, after initially trending down, shares of Las Vegas Sands Corp. (LVS - Free Report) regained most of the losses and gained 1.3%.
What’s the Fuss About?
The Las Vegas Strip has been recording high occupancy rates over the past year. The improvement in employment rate and rise in tourism numbers have been boosting demand at the casino companies’ properties in the region and adding to their top-line growth.
Reportedly, Las Vegas’ casinos, nightclubs and shopping attract roughly 3.5 million visitors each year from around the world.
Investors are thus apprehensive that tourists might choose to stay away from Las Vegas in the wake of what became the deadliest mass shooting in modern U.S. history.
MGM Resorts owns and operates 13 resorts and casinos on the Las Vegas Strip. In fact, this casino operator has maximum U.S. exposure compared with its peers and is thus severely affected by the incident. Additionally, a potential revenue loss from its Mandalay Bay property might have an impact on the company’s fourth-quarter results.
We believe the latest rampage that rattled the Strip might bring the region’s revenues under pressure and in turn hamper casino operators’ performance in the near term. Thus, we will have to wait and see what impact it has on casino companies’ properties on and around the Las Vegas Strip.
While Wynn Resorts currently holds a Zacks Ranks #2 (Buy), MGM Resorts, Boyd Gaming and Las Vegas Sands carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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