PNC
Morgan Stanley is cautious on the U.S. gaming sector on the expectation that consumer spending could slow and the share of wallet for gambling reverts closer to historical levels. The firm now has 2023-2024 EBITDAR expectations for the U.S. below the consensus averages.
While valuation is getting more attractive for the group, the firm thinks it is too early to be constructive on the group with earnings revisions still ahead. In the current environment, Morgan Stanley said it is looking for idiosyncratic drivers of growth and/or de-risked expectations.
Specific stocks singled out as breaking away from the industry headwinds included DraftKings (NASDAQ:DKNG), Las Vegas Sands (LVS), and Red Rock Resorts (RRR).
DraftKings (DKNG) was called the top overall sector pick with 34% upside for the base case. Analyst Stephen Grambling and team expect a positive catalyst path near term for…
