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Eye on Equities

Time to roll the dice on Las Vegas Sands? Add to ...

Shareholders of Las Vegas Sands Corp. hit the jackpot this fall as the stock catapulted by more than $20, marking a gain so far this year of about 250 per cent. Those not so lucky may be left to gamble on when the stock again will trade at an attractive entry point.

Las Vegas Sands is not only a big player in Las Vegas, where it owns the Venetian and Palazzo resorts, it has significant assets in Macao, just outside of Hong Kong, which is seeing a return to rapid growth following a near-collapse of activity during the recessionary slowdown. It's also developing properties in Singapore and Pennsylvania.

Profit-takers have already had their influence, with shares now trading near $50, down from a 52-week high of $55.47 on Nov. 5. But UBS analysts Robin Farley and Robert Carroll are advising caution before deciding to load up, today downgrading their rating to "neutral" from "buy".

The UBS analysts said they remain positive on the outlook for Las Vegas Sands and its potential to outperform their financial estimates, but indicated a better buying price could emerge. Nearer-term upside is heavily factored into the stock and many positive catalysts - including the expected resolution of labour issues in Macau that would have delayed a new casino opening in 2012 - are already largely reflected in current valuations, they said.

That said, UBS clearly believes this is a company poised for tremendous growth. "We continue to believe LVS' property EBITDA (earnings before interest, taxes, depreciation and amortization) could exceed $4 billion (U.S.) as soon as 2013, up from $1.1 billion as recently as 2009," the two analysts wrote in a report.

Downside: UBS raised its 12-month price target on the stock to $52 (U.S.) from $44. That compares with a median share price forecast of $50.00 amongst 21 analyst estimates compiled by Capital IQ.

Canadian National Railway Co. shares have significantly underperformed their North American peers over the past three weeks and do not reflect the firm's position as the best-in-class Canadian railroad, said Raymond James analyst Steve Hansen.

Upside: Raymond James upgraded its rating to "outperform" from "market perform" and maintained a six- to 12-month price target of $72.00.

Polaris Minerals Corp. has resolved its short-term liquidity issues after securing a $5-million (Cdn) bridge loan facility and reaching a deal to sell land it owns at a California port for about $14 million (U.S.), said Canaccord Genuity analyst Gary Lampard.

Upside: Mr. Lampard upgraded the stock to a "speculative buy" from a "hold" while raising his 12-month target price to $1.85 from $1.00.

Grande Cache Coal Corp .'s share price already reflects favourable market conditions for metallurgical coal and is trading at a premium to valuation, said CIBC World Markets Inc. analyst Alec Kodatsky.

Upside: Mr. Kodatsky downgraded Grand Cache to "sector underperformer" from "sector performer," but raised his price target to $8.10 from $7.40 as a result of including some additional surface coal resources in his modeling.

Jazz Air Income Fund reported third-quarter results that were close to estimates, but the company's indications for cash flow in fiscal year 2011 and implied operating earnings were surprisingly weak, said TD Newcrest analyst Tim James. He still believes the fund's 60-cent annual dividend is secure, although it is at greater risk.

Downside: Mr. James lowered his price target by 25 cents to $4.75 and continues to rate the stock as a "hold."

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