On Friday, Mizuho Securities adjusted its outlook on Las Vegas Sands Corp (NYSE:LVS) by reducing the price target to $51.00 from the previous $65.00, while keeping an Outperform rating on the company's shares. The firm's analysts revised their estimates for Las Vegas Sands' second-quarter performance, citing lower expectations for the company's operations in both Singapore and Macau.
The revision reflects a more conservative stance on the anticipated earnings before interest, taxes, depreciation, and amortization (EBITDA) for the company's ventures in the two regions. Mizuho's new estimate for Las Vegas Sands' second-quarter Macau EBITDA stands at $581 million, compared to the Street's consensus of $625 million. For Singapore, the firm anticipates an EBITDA of $483 million, slightly below the Street's expectation of $492 million.
According to Mizuho, the investor sentiment for Macau's quarterly performance is likely around $600 million, and for Singapore, it is approximately $500 million. The firm pointed out that the ongoing construction at the Londoner property in Macau might not be fully accounted for in the consensus estimates. This factor, along with what Mizuho perceives as generally unimpressive trends in Macau and a fragile economic environment in China, contributed to the lowered expectations.
Additionally, the visitation trends in Singapore during May and June were not as strong as anticipated, which also played a part in the firm's decision to adjust its EBITDA forecast downward for the region. These revised projections come ahead of Las Vegas Sands' upcoming quarterly financial report, as the market gauges the company's performance amid varying regional dynamics.
In other recent news, Las Vegas Sands Corporation has been the subject of positive attention from CFRA, with the firm raising its stock price target from $60 to $61. This upgrade is based on strong Q1 earnings per share (EPS) of $0.78, exceeding consensus estimates by $0.16, and revenues of $2.96 billion, surpassing estimates by $19 million.
The analyst maintains EPS forecasts of $2.50 for 2024 and $3.00 for 2025, supported by a heightened 2024 adjusted EBITDA estimate of $3.9 billion.
The company's robust performance is attributed to the Marina Bay Sands property and increased visitation and mass gaming revenue in the Macao region. Marina Bay Sands reported a significant EBITDA increase to $597 million, up from $394 million the previous year. Similarly, in Macao, Las Vegas Sands reported an adjusted EBITDA of $610 million, a substantial improvement from $398 million a year earlier.
These recent developments underline the recovery and growth in key markets for Las Vegas Sands. The company has also demonstrated resilience in its Q1 2024 results, despite ongoing renovations and constraints in Singapore due to limited hotel rooms and slot machines. Las Vegas Sands remains focused on margin improvement and asset optimization, with an interest in expanding into the Thai market.
Analysts anticipate that the robust cash flow will be utilized to manage debt and continue returning capital to shareholders.
InvestingPro Insights
Mizuho Securities' recent adjustment of its outlook on Las Vegas Sands Corp (NYSE:LVS) aligns with some of the challenges highlighted in the InvestingPro Tips. While the company has been praised for its impressive gross profit margins, currently at 77.61%, analysts have tempered their enthusiasm by revising earnings expectations downwards for upcoming periods. This caution may be influenced by Las Vegas Sands trading near its 52-week low, indicating a period of underperformance in the market.
Despite these concerns, the InvestingPro Tips also point out that analysts predict Las Vegas Sands will be profitable this year, a sentiment supported by the company's profitability over the last twelve months. Additionally, Las Vegas Sands operates with a moderate level of debt, which could provide some financial stability as it navigates through the current economic environment.
From a valuation perspective, Las Vegas Sands' P/E ratio stands at 20.53, with a slight adjustment to 19.85 for the last twelve months as of Q1 2024. However, the company is trading at a high Price / Book multiple of 7.98, which may suggest that the stock is priced above the value of its net assets. For investors considering this stock, it's worth noting that there are 18 additional InvestingPro Tips available, which could provide further insights into Las Vegas Sands' financial health and market position.
Readers interested in a deeper analysis can explore these tips and more on InvestingPro, and can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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