On Thursday, CFRA increased its price target for Las Vegas Sands Corp. (NYSE:LVS) shares to $61, up from the previous target of $60, while retaining a Buy rating on the stock. The adjustment reflects a valuation set at 14 times the firm's 2024 adjusted EBITDA estimate, aligning with Las Vegas Sands' 10-year average forward EV/EBITDA multiple.
The firm's analyst cited the company's strong first-quarter earnings per share (EPS) of $0.78, which exceeded the consensus estimates by $0.16, as a key factor for the revised target. The reported Q1 revenues were $2.96 billion, surpassing estimates by $19 million.
The analyst maintained the EPS forecasts of $2.50 for 2024 and $3.00 for 2025. The raised price target is supported by a heightened 2024 adjusted EBITDA estimate of $3.9 billion. This increase is attributed to the sustained performance of the Marina Bay Sands property and a rise in visitation and mass gaming revenue in the Macao region. The Marina Bay Sands property reported a significant increase in EBITDA to $597 million, up from $394 million the previous year. Adjusted for the expected hold rate, the EBITDA for the property would have been $520 million.
In Macao, the adjusted EBITDA for Las Vegas Sands was $610 million, a substantial improvement from $398 million a year earlier. Adjusting for the expected hold rate, Macao's EBITDA would have been $623 million. These figures underscore the recovery and growth in key markets for the company.
The analyst also anticipates that Las Vegas Sands will utilize its robust cash flow to manage debt obligations due within the year and to continue returning capital to its shareholders. The positive outlook on the stock is reinforced by the company's financial strategies and the recovery trajectory of its key properties.
InvestingPro Insights
Las Vegas Sands Corp. (NYSE:LVS) has been trading at a high Price / Book multiple of 9.16 as of the last twelve months leading up to Q1 2024, indicating a premium valuation that investors are willing to pay for its assets. This aligns with the CFRA's optimistic view, as the company's gross profit margins have been impressive, standing at 77.13% over the same period. The robust gross profit margins and the analysts' prediction that the company will be profitable this year, with a basic and diluted EPS from continuing operations at $2.06, underpin the strong financial health of Las Vegas Sands.
Investors should note that the company's revenue has experienced a substantial growth of 112.05% over the last twelve months as of Q1 2024, which is a testament to the company's recovery and expansion in its significant markets. This explosive growth in revenue may justify the high revenue valuation multiple that LVS currently enjoys. For those looking to delve deeper into the financial intricacies of Las Vegas Sands, InvestingPro provides additional insights, including 4 more InvestingPro Tips to help investors make informed decisions. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription for a comprehensive investment analysis.
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