Here's Why Las Vegas Sands Is The 'Best Long-Term Vehicle'

Despite the recent runup in the stock, CLSA’s Jon Oh believes Las Vegas Sands Corp. (NYSE: LVS) is the “best long-term vehicle.” He maintained an Outperform rating on the company, while raising the price target from $50 to $58.

The Impressive Parisian

Following a visit to the Parisian, during its opening week, the analyst expressed confidence that the property would emerge as the new “poster child of mass appeal” for Macau.

“We believe the Parisian strengthens the company’s stranglehold on Macau’s mass market, and walked away convinced that Sands’ business model is the most attractive vehicle to express our conviction in Macau’s long-term potential,” Oh elaborated.

The analyst was impressed with the Parisian’s Aqua World water park, Eiffel Tower and the fresh retail offerings, which Oh believes could become popular attractions for mainland tourists, driving growth in overall visitation.

Related Link: Argus Upgrades Las Vegas Sands; Macau Gaming Revenue Up For First Time In 2 Years

EBITDA Expectations

“The c.2,900-3,000 rooms are priced affordably and will play an important part in extending overall length of stay. Our preliminary assessment suggests that daily foot traffic for this property is rivaling the 80-100k average that is at the Venetian,” Oh stated.

The analyst also expressed confidence that the Macau EBITDA would reach $2.4 billion by 2018, with the Parisian EBITDA expected at $198 million for 2017 and $362 million for 2018.

In addition, Oh does not believe that there would be any self-cannibalization, given that the Parisian represents an expansion of Las Vegas Sands’ footprint, which would strengthen the company’s position in Cotai.

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