Crown Resorts has been deemed unsuitable for the Crown Sydney licence and Macquarie assesses the pathway to obtaining approval is onerous and may take two years.
The broker believes the NSW casino inquiry report brings into question the company’s suitability to operate both the Melbourne and Perth casinos. Nevertheless, Macquarie expects Melbourne and Perth gambling will continue without hindrance.
As there is a high level of risk and uncertainty as to how the company will manage the pathway to approval going forward, the broker downgrades to Neutral from Outperform. Target is reduced to $8.30 from $11.00.
Sector: Consumer Services.
Target price is $8.30.Current Price is $10.15. Difference: ($1.85) – (brackets indicate current price is over target). If CWN meets the Macquarie target it will return approximately -22% (excluding dividends, fees and charges – negative figures indicate an expected loss).