Bernstein has lowered its EBITDA estimate for Sands China on concerns of a seasonally soft quarter.
The brokerage published the note on Monday, saying its estimate for 16Q2 EBITDA was cut by 6 perecent, and 2 percent for the full year. Its 2017 forecast was also trimmed by 1 percent.
“Q2 data points have all trended below initial expectations with -9 percent year-on-year GGR growth and -10 percent year-on-year decline in RevPAR for 5-star hotels,” said the brokerage.
However, despite the negativity, the quarter also marks a turning point for the mass segment.
“Over time, we believe the paradigm shift to mass will continue, driven by the opening of new casinos and improving transportation infrastructure.”
The brokerage says the operator’s share price still has room for upside given a sustainable dividend yield of 7 percent, its reliance on a growing mass, and undemanding valuation multiples.