3 Big Sectors May Face Post-Sandy Downgrades: Moody's
"We expect Atlantic City revenues to be down 25% in both the fourth quarter of 2012 and the first quarter of 2013, excluding the effect of any insurance recoveries," writes credit analysts Keith Foley and Peggy Holloway, in a Tuesday ratings note. The analysts said the already junk rated Revel Atlantic City casino may be most at risk of a downgrade, while other low-rated casinos like Caesars Entertainment (CZR) and Tropicana Entertainment may also face the prospect of a cut.
After Sandy hit, late October analysis by Credit Suisse estimated fourth-quarter Hurricane Sandy-related insurance industry losses between $5 billion and $15 billion, and the bank cut its price targets for Allstate, Arch Capital (ACGL) , Chubb (CB) and Travelers (TRV) .
On Oct. 31, Goldman Sachs analysts said home-improvement giants like Home Depot (HD) , Lowe's (LOW) , Lumber Liquidators (LL) and Owens Corning (OC) would benefit from Sandy, as homeowners and businesses spend heavily to repair houses, offices and stores.
Within the retail sector, the Goldman analysts, led by Matthew Fassler, also forecast a hit to casinos, restaurants and discount stores, highlighting Boyd Gaming (BYD) , The Cheesecake Factory (CAKE) , Dollar Tree (DLTR) , Dunkin' Brands (DNKN) , Five Below (FIVE) and Panera Bread (PNRA) .
Bank of America Merrill Lynch analysts suggested in late October that for refineries, a loss in demand for energy products may be greater than production shortfalls as some Eastern Seaboard refineries went off line.