Las Vegas Sands Stock Seen As 'Overly Compelling' As Analysts Highlight Macau Recovery, Project Return To 'Pre-Pandemic Levels'

Las Vegas Sands Corp (NYSE:LVS) receives praise from analysts for its strong position in Macau and the recovery of the region after missing third-quarter earnings per share and revenue estimates.

The Las Vegas Sands Analysts:

• Morgan Stanley analyst Stephen Grambling maintained an Overweight rating on LVS with a $55 price target.
• Stifel analyst Steven Wieczynski maintained a Buy rating and raised the price target from $55 to $64.

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Morgan Stanley on LVS: Weaker hold in Singapore led to a miss for revenue and earnings, but Macau regional results were strong, Grambling said in a new investor note.

"Macau EBITDA was a positive surprise, coming in at $587m," Grambling said.

The analyst noted the EBITDA total was up from the second quarter and ahead of estimates.

Las Vegas Sands announced a dividend increase and a $2 billion share buyback, as well as the repurchase of $450 million of stock in the third quarter.

"The combined buyback + dividend would equate to ~7% of the market cap," Grambling added.

The analyst expects a positive response from investors to the Macau results and positive commentary on the region.

Lowering operating costs and improving promotional activity should give investors confidence for the Macau region, Grambling said.

"Even with the recent run-up in Macau-focused stocks, LVS trades at ~11x our 2025e EBITDA, below the historical NTM of ~13.5x."

Stifel on LVS: With Las Vegas Sands shares up around 30% since early September, there could be more upside ahead after the quarterly results and company commentary, Wieczynski said in a new investor note.

"We believe the setup for LVS shares is overly compelling at this point, and we see multiple catalysts on the horizon that should allow shares to drift higher from current levels," Wieczynski said.

The analyst sees a clear path to $60 or more per share, with investors likely more comfortable with Macau names.

"Macau-centric names should be a group that could outperform given the fact demand patterns are accelerating which should allow for positive estimate revisions."

With investors previously wanting nothing to do with China stocks, the analyst sees optimism in the region and Macau names among the best to own going forward.

"We believe visitation/spend trends in Macau will continue to accelerate and eventually reach pre-pandemic levels."

The analyst highlighted future catalysts for Las Vegas Sands, including the October/November Macau GGR data, the 2024 election coming to an end and giving investors a better idea of China/U.S. relations, and an investor meeting in mid-November.  

"No matter who wins the upcoming election we believe just knowing who will be running the United States for the next four years will allow investors to better handicap the potential pros/cons and eventually understand that China/U.S. relations should be on stable footing."

Wieczynski calls Las Vegas Sands one of the "most defensible names in gaming" with a dominant position in Macua, the world's top gaming market.

LVS Price Action: Las Vegas Sands shares are up 2% to $51.83 on Thursday, versus a 52-week price range of $36.62 to $55.66. Las Vegas Sand stock is up 1% year-to-date in 2024.

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