Las Vegas Sands (LVS) Soars on Strong Macau Performance: Analysts Remain Bullish
Las Vegas Sands Corp. (LVS) is riding high on the back of strong performance in Macau, a trend that has analysts bullish despite the company missing third-quarter earnings and revenue estimates. While the weaker hold in Singapore led to the miss, analysts are focusing on the positive developments in Macau, where LVS holds a dominant position.
Morgan Stanley’s Positive Outlook
Morgan Stanley analyst Stephen Grambling maintained an Overweight rating on LVS with a $55 price target. Grambling highlighted the impressive EBITDA (earnings before interest, taxes, depreciation, and amortization) performance in Macau, which came in at $587 million, surpassing estimates and showing an increase from the second quarter. The analyst believes that the strong results, coupled with the company’s dividend increase, $2 billion share buyback, and the repurchase of $450 million of stock in the third quarter, will be well-received by investors. Grambling expects confidence in the Macau region to grow as the company continues to lower operating costs and improve promotional activities.
Stifel’s Bullish Stance
Stifel analyst Steven Wieczynski echoed the sentiment, maintaining a Buy rating and raising the price target from $55 to $64. Wieczynski believes that LVS shares are undervalued and sees significant upside potential. He highlighted the accelerating demand patterns in Macau, which should lead to positive estimate revisions. Wieczynski sees Macau-centric names as potential outperformers, considering the region’s strong growth trajectory. He expects visitation and spending in Macau to eventually reach pre-pandemic levels, further bolstering LVS’s performance.
Key Catalysts for Future Growth
Wieczynski pointed out several key catalysts that could propel Las Vegas Sands’s growth in the coming months. These include the October/November Macau GGR (gross gaming revenue) data, the 2024 election outcome, which will provide clarity on China-U.S. relations, and an investor meeting scheduled for mid-November. He believes that the election outcome, regardless of the winner, will offer investors a better understanding of the potential pros and cons of China-U.S. relations and contribute to stability in the region.
Dominant Position in Macau
Both analysts view Las Vegas Sands as a prime player in the gaming industry, emphasizing its dominant position in Macau, the world’s top gaming market. Wieczynski calls it one of the “most defensible names in gaming” due to its strong market presence and growth prospects.
Positive Price Action
Las Vegas Sands shares responded positively to the strong Macau results, rising 2% to $51.83 on Thursday. This follows a year-to-date gain of 1% for 2024. With analysts maintaining a bullish stance and positive momentum in Macau, Las Vegas Sands appears poised for continued growth in the coming months.