Melco Crown Entertainment Ltd. (6883), a Macau casino operator, jumped the most in five weeks in New York as Goldman Sachs Group Inc. upgraded the stock to buy.
Melco’s American depositary receipts, each representing three ordinary shares in the company, gained 4.9 percent to $13.67 at the close of trading in New York, the biggest one-day advance since March 7. The ADRs have climbed 42 percent this year. Melco’s Hong Kong shares fell 1.1 percent to HK$35.25.
The Hong Kong-based company’s City of Dreams casino on Cotai, a gambling strip in Macau, gained market share in 2011 even as Galaxy Entertainment Group Ltd. (27) opened its Galaxy Macau site in May, Goldman analysts led by Simon Cheung in Hong Kong wrote in a research note dated today. The New York-based bank boosted stock of Melco, a venture between billionaires James Packer and Lawrence Ho, to buy from neutral.
The opening today of the $5 billion Sands Cotai Central casino, a project of Las Vegas Sands Corp. (LVS:US), will benefit Melco by providing a “spillover effect” for City of Dreams, located across the street from the Sands Cotai, Cheung wrote.
Goldman raised its 12-month price target for Melco’s ADRs to $17.10 from $12.70, and to HK$44.40 from HK$33 for the Hong Kong shares.
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