On Thursday, Deutsche Bank maintained a positive stance on Las Vegas Sands Corp. (NYSE:LVS), raising its price target on the company's stock to $60 from $55, while reiterating a Buy rating.
The firm's analyst highlighted the uneventful nature of the recent results, noting that the performance in Macau was solid compared to expectations, despite the Marina Bay Sands (MBS) results being slightly below what many had anticipated.
The analyst pointed out that there are no significant shifts in the investment thesis for Las Vegas Sands following the company's recent earnings report and management commentary. The current interest in the company's shares and the narrative surrounding Las Vegas Sands' ability to minimize disruptions in Macau by 2025 were cited as key factors supporting the firm's outlook.
Additionally, the potential for market share gains was mentioned as part of the broader narrative for the company.
Las Vegas Sands' operations in Macau, a key market for the company, were described as fairly solid. This assessment comes even as the MBS segment did not perform as well as some might have expected. Nevertheless, the analyst believes that these factors do not materially alter the investment thesis for Las Vegas Sands.
The analyst's revised estimates are slightly higher, leading to the increased price target. This adjustment reflects a continued endorsement of the stock, with the analyst concluding that the broader narrative for Las Vegas Sands remains intact and positive.
In summary, the firm's analyst sees these elements as framing the investment case for the company, leading to the decision to raise the price target while maintaining a Buy rating on the stock.
In other recent news, Las Vegas Sands Corp experienced a decline in third-quarter earnings and revenue, falling short of analyst expectations. The company reported a quarterly profit of $0.44 per share, missing the average analyst projection of $0.53 per share. Total quarterly revenue also decreased by 4%, settling at $2.68 billion, which was below the anticipated $2.78 billion estimated by analysts.
These results were influenced by ongoing renovations at the Londoner casino in Macao and a decline in per table income in Singapore.
Citi, in response to these developments, has adjusted its outlook on Las Vegas Sands, reducing the price target on the company's shares to $64.50 from $70.00, while maintaining a Buy rating. Despite a lower than expected overall third-quarter property EBITDA of $991 million, the company's Macau operations reported strong earnings, surpassing consensus estimates, and contributing to the EBITDA recovery story in Macau.
In addition to these financial updates, Las Vegas Sands announced an increase in its expected dividend per share for fiscal year 2025 to $1.00, up from $0.80 for fiscal year 2024, and authorized an additional $2 billion in future share repurchases.
However, the company also disclosed an increase in its capital expenditure budget to $8.0 billion, up from the previous estimate of $3.3 billion, which may be perceived unfavorably by investors. Despite these changes, Citi maintains a positive outlook on the company, citing the recovery in Macau and the stable operating cash flows from Marina Bay Sands.
InvestingPro Insights
Building on Deutsche Bank's positive outlook for Las Vegas Sands Corp. (NYSE:LVS), recent data from InvestingPro provides additional context to the company's financial performance and market position. LVS boasts impressive gross profit margins, with the latest figures showing a margin of 76.91% for the last twelve months as of Q2 2024. This aligns with the analyst's assessment of solid performance, particularly in the Macau market.
InvestingPro Tips highlight that LVS operates with a moderate level of debt and has liquid assets exceeding short-term obligations, suggesting financial stability that could support the company's ability to navigate potential disruptions and pursue market share gains as mentioned in the Deutsche Bank analysis.
The company's strong returns over the last month (15.01%) and three months (27.26%) reflect positive investor sentiment, which corresponds with the analyst's view on the current interest in LVS shares. Additionally, InvestingPro data shows a revenue growth of 68.48% over the last twelve months, indicating robust business expansion that could contribute to the potential market share gains discussed in the article.
For investors seeking a more comprehensive analysis, InvestingPro offers 10 additional tips for LVS, providing deeper insights into the company's financial health and market position.
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