Genting SP

Genting SP: cuts TP to $1.65 from $1.77 while keeping a Hold call. Although Genting posted "decent sequential gaming volume growth in 1Q," with gross gaming revenue (GGR) up 10% on-quarter, the house sees "limited upside potential in the near term" given that fresh gaming ventures and junket benefits are likely to materialize only over the next 12 to 18 months. Cuts Genting's Ebitda forecasts--2012 by 3.9%, 2013 by 2.2% and 2014 by 3.3%--noting that improving underlying gaming trend didn't help earnings grow sequentially, as they were "eroded by higher marketing/commission expenses, bad debt provisions and a lower VIP hold of 3.4%." Based on the lower Ebitda forecasts, Genting's revised balance sheet, and expectations for higher capex, Deutsche cuts price target after valuing its gaming business at 12X 2012 forecasted EV/Ebitda. The stock falls 1.3% to $1.53 in a weak market.