On Thursday, Mizuho Securities adjusted its financial outlook for Las Vegas Sands Corp (NYSE:LVS), reducing the price target on the company's shares to $65 from the previous target of $70. Despite this change, the firm continues to recommend a Buy rating on the stock.
The revision in the price target by Mizuho is rooted in a sum-of-the-parts (SOP) analysis. The firm applies an 11 times multiple to its estimated 2025 EBITDA for Las Vegas Sands' operations in Macau, which is projected to be around $2.9 billion, resulting in a valuation of $24 per share. For the company's Singapore segment, a 13 times multiple is used against the forecasted 2025 EBITDA of approximately $2.2 billion, assigning a value of $41 per share.
The analysis also accounts for a corporate or parent company drag, which is estimated to reduce the valuation by $6 per share. Additionally, the firm incorporates two years of free cash flow (FCF), which adds another $6 per share to the valuation.
Mizuho's approach to setting the price target for Las Vegas Sands is detailed and considers various aspects of the company's financial performance and potential. The firm's maintained Buy rating suggests a continued positive outlook on the stock, despite the lowered price target.
InvestingPro Insights
With Las Vegas Sands Corp (NYSE:LVS) continuing to capture attention, real-time data from InvestingPro provides additional insights for investors considering the company's stock. The company's market capitalization stands at a robust $37.74 billion, and while it trades at a high Price to Earnings (P/E) ratio of 31.38, the adjusted P/E ratio for the last twelve months as of Q1 2024 is lower at 23.76. This could indicate a more favorable earnings outlook as reflected in the company's recent performance.
InvestingPro Tips highlight Las Vegas Sands' impressive gross profit margins, which have reached 77.13% over the last twelve months as of Q1 2024, underlining the company's ability to maintain profitability. Additionally, analysts predict the company will be profitable this year, which aligns with the company being profitable over the last twelve months.
For those looking to delve deeper into the financial metrics and strategic insights, InvestingPro offers 20+ additional InvestingPro Tips for Las Vegas Sands, which can be accessed at: https://www.investing.com/pro/LVS. To enhance your investing strategy, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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