Deutsche Bank is out with a very significant call on Melco (NASDAQ:MPEL) saying that after their visit to Macau, they remain bullish on the phenomenal growth in Crown's VIP business.
Channel checks suggest Crown rolled almost HK$50bn in Feb. Firm thinks MPEL will deliver a stellar performance in 1Q, based on solid rolling and a high hold in Jan-Feb. They are raising their 1Q08 EBITDA forecast by 43% to $70m, the highest on the Street.
Channel checks suggested that Crown rolled almost HK$50bn in Feb, or 23% of Macau's VIP play. This lifted Crown's overall market share from 16% in Jan to 18% in Feb.
City of Dreams looked on track to openPhase 1 by end of 1Q09, with the main podium superstructure works 95% complete. DB sees this as one of the best location on the Cotai Strip, being near the airport and ferry terminal, and directly across from the Venetian.
Given the strong trends in VIP rolling, they are raising our FY08 EBITDA estimate by 22% to $261m.
Reiterates Buy, $22 target on MPEL as a strong operator with market share gains.
Notablecalls: This looks like a very significant call for MPEL. I expect the call to generate meaningful buy interest in the stock over the next couple of days. It's not every day you see EBITDA ests upped by 43% to a new Street high.