S&P Boosts Target on Las Vegas Sands

Plus: Analyst opinions on Arch Coal and Monsanto

Las Vegas Sands (LVS)

Reiterates 3 STARS (hold)

Analyst: Thomas Graves, CFA

We continue to expect Sands on to post Q4 EPS before special items of 35 cents, vs. 33 cents one year earlier, on Feb. 5, with strong results from Macau. We look for various Sands-related projects to open in the Cotai area of Macau over the next few years. In our view, the fourth quarter growth of the overall Macau gaming market, with gaming revenue up 45%, and Sands' licensing success for a Pennsylvania casino project bodes well for longer-term prospects. Largely from adding sizable value of projected Hengqin Island (China) real estate sales, we are raising our sum-of-parts 12-month target price to $105 from $73.

Arch Coal (ACI)

Downgrades to 4 STARS (buy) from 5 STARS (strong buy)

Analyst: C. Lippincott

We are lowering our target price to $34 from $35, based on relative valuation and discounted cash-flow analyses. We are cutting our 2007 EPS estimate to $1.65 from $3.00 and setting 2008's at $3.11 as we reduce our volume and pricing projections. We expect Arch to limit production in 2007 in effort to maintain prices amid excess supply at electric utility customers. The company posts fourth quarter EPS of 55 cents, vs. 13 cents, both before unusual items, 12 cents above our estimate due to beneficial tax rates. Total tonnage grew 1%, while realized prices fell 11%. Following the shares' recent rise, we see somewhat less upside.

Monsanto (MON)

Reiterates 3 STARS (hold)

Analyst: K. Kirkeby, CFA

We have reviewed our earnings model following a further rise in corn prices during January and recent government pronouncements supporting biofuel initiatives. We believe farmers will respond by not only increasing corn acreage, but also by using more premium seeds. We are increasing our EPS estimate for fiscal 2007 (ending August) by 4 cents to $1.63, largely to reflect higher expected margins at Monsanto's seeds and traits segment. We are also raising our 12-month target price by $5 to $57, based on a blend of our discunted cash-flow model with a sector premium enterprise value/EBITDA ratio of 16 times.

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