The city is still attracting enough tourists and gamblers to go around, even with the new Aladdin, analysts say. The boost has benefited most of the strip's large operators. Analysts think there are more good times immediately ahead for casino stocks. Beyond Las Vegas, the riverboat business is strong. More mergers, in addition to the recent MGM Grand-Mirage combination, are possible.
Stock values are still relatively low.
And cash flow is up, enabling operators to pay down debt and repurchase shares. But some observers wonder if the industry is closing in on the end of a cycle, particularly if the economy runs out of gas. Although business held up fairly well during the last economic slump 10 years ago, jittery investors dumped casino shares. Farley says the impact could be softened the next time around because the industry is more diverse. But a recession would still imperil stocks, she says.