Credit Suisse assumes Crown Resorts retains its Melbourne casino licence, under supervision. Yet, having been asked to present a break-apart valuation the broker arrives at a downside-case valuation of $7.50 a share, which assumes licences are retained in Western Australia and NSW.
One complexity in Melbourne is that the casino building is on leased government land while separately Crown Resorts has adjacent wholly-owned operations. Neutral rating and $10.10 target maintained.
Sector: Consumer Services.
Target price is $10.10.Current Price is $8.95. Difference: $1.15 – (brackets indicate current price is over target). If CWN meets the Credit Suisse target it will return approximately 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).