Las Vegas Sands Upgraded on Macau Optimism

Las Vegas Sands Upgraded on Macau Optimism.

Costfoto / NurPhoto / Getty Images

Key Takeaways

Las Vegas Sands (NYSE: LVS) notched a modest rally Friday after shares of the casino giant landed an upgrade from a sell-side analyst.

Sands ChinaThe Venetian Macau. Jefferies upgraded shares of operator Las Vegas Sands. (Image: YouTube)

Jefferies analyst David Katz lifted his rating on the Venetian Macau operator to “buy” from “hold” while lifting his price target on the stock to $69 from $60. That implies potential upside of almost 38% from current levels. The analyst cited the possibility of an improving Chinese economy as a potential catalyst for Sands stock in 2025.

Although it is early stages and visibility into progress remains relatively low, we are confident that given LVS exposure to the mass segment, improvements to the macro environment will provide an outsized benefit for the company,” observed Katz.

Jefferies’ price target is based on Sands trading at 20x earnings, 12.5x price-to-free cash flow, and 11x enterprise value/earnings before interest, taxes, depreciation, and amortization (EV/EBITDA).

Las Vegas Sands Upgrade Arrives at Important Time

The upgrade of Las Vegas Sands is the first to start 2025 and marks at least the second positive commentary on in the early innings of the new year.

Jefferies’ constructive view on Sands also arrived after the gaming stock gained barely more than 4% last year, trailing the S P 500 by a roughly 6-to-1 margin. In fairness to Sands, 2024 was another rough year for Macau gaming equities despite the fact that gross gaming revenue (GGR) grew. Concessionaires there in GGR last year, which was good for 24% year-over-year growth.

Katz said he expects Macau GGR will rebound to pre-coronavirus pandemic levels in 2026 after reaching 80% of those highs last year.

Sands is poised to capitalize on that growth with upgrades at the Londoner Macau slated to be finished in the first half of this year and if Beijing unveils more targeted monetary stimulus that could boost consumer discretionary spending. Such action could prove meaningful to Sands because in Macau, the operator is heavily reliant on mass and premium mass patrons. The Jefferies upgrade helped LVS to a gain of 1.04% on below-average volume.

Another Jefferies Upgrade

The Sands upgrade was part of a slew of adjustments by Katz on a variety of gaming stocks, another of which was Boyd Gaming (NYSE: BYD). The Orleans operator jumped 1.52% today after upgraded the shares to “buy” from “hold” with a $92 price target, implying upside of 26.7% from today’s close.

Las Vegas-based Boyd in its home market, including Aliante, California, Cannery, Fremont, Gold Coast, Jokers Wild, Main Street Station, Sam’s Town, Suncoast, and The Orleans. It also operates regional casinos in Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio, and Pennsylvania.

Katz said the opening of the operator’s temporary casino in Norfolk, Va. later this year could be a spark for the shares adding that investors continue to underappreciate the company’s 5% stake in FanDuel the largest domestic online sportsbook firm.

Article Sources
William Hill Leaves Czech Market as Punitive Online Gambling Reforms Come into Force editorial policy.
  1. DOJ Files Motion to Dismiss New Hampshire Challenge to Wire Act Opinion

Compare Accounts
×
Ireland Gambling Regulator Could Be in Place by 2020: Will Issue Licenses, Impose Fines
Provider
Name
Description
Illinois Gov. Pritzker Declines to Renew Mobile Sports Betting Registration Order  American Gaming Association Hall of Fame 2018 Class Inducts Four Behind-the-Scenes Powerhouses of Yore  Bermuda Promises Reforms to Greenlight Casinos, But Optimism Fading Fast  NY Lawmakers Joseph Addabbo and Gary Pretlow Seek to Authorize iGaming  Macau Satellite Casinos Could Be Under Threat in Relicensing Process  Clark County Officials Vow to Crack Down on Las Vegas Valley ‘Cockfighting Problem’  Harrah’s New Orleans Should Settle Lawsuit Brought by Barred Black Woman, Lawyers Advise  Football Odds on NFL Playoffs and College National Championship Line Up  Philweb Sells German Operations to Help Buy Back Philippine License  International Game Technology Wins Patent for Bitcoin Slot Machine Transactions