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Here's Why Investors Should Retain Las Vegas Sands (LVS) Stock
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Las Vegas Sands Corp. (LVS - Free Report) is likely to benefit from the strong business model, revenue diversification efforts and expansion initiatives. Also, the emphasis on sales-building initiatives to boost non-gaming revenues in Macau bodes well. However, a decline in traffic from pre-pandemic levels is a concern.
Let us discuss the factors that highlight why investors should retain the stock for the time being.
Factors Likely to Drive Growth
Shares of Las Vegas Sands have gained 39.2% in the past three months compared with the industry’s 14.9% growth. The company is benefiting from a solid business model, extensive non-gaming revenue opportunities, high-quality assets and attractive property locations. The strong portfolio has somewhat aided the company in countering the economic downturn in China.
Image Source: Zacks Investment Research
Las Vegas Sands is quite confident about its growth opportunity in Singapore. Despite the coronavirus crisis, the company announced that it would continue to invest in the expansion of Marina Bay Sands, Singapore, to reinforce its dominant position in the region. During third-quarter 2022, the company reported accelerated recovery in its Singapore business backed by improvement in airlift activities and relaxation of pandemic-related restrictions. The company emphasized on increasing its investment in the Singapore market and boosting offerings throughout 2022 and 2023. It anticipates demand in Singapore to be robust after travel and tourism spending return to normal.
The company is optimistic about Macao’s recovery. During the third quarter, the region appeared resilient owing to strong customer demand and robust spending at the premium mass level from the gaming and retail perspective. With the easing of restrictions and recovery in travel and tourism, the company anticipates generating strong positive cash flows from the region in the days ahead.
Las Vegas Sands’ diversification efforts in Macao are quite encouraging. The company has invested more than $13 billion in Macao since 2004, consistently contributing to Macao's diversification and appeal as a business and leisure tourism destination. The company announced that it would proceed with its $2.2-billion investment to strengthen its position in Macao. During the third quarter, the company announced that its investments in Macao were approaching completion. It anticipates Four Seasons Londoner to drive growth prospects in both the premium and mass customer segments as the market continues to recover.
Backed by these investments, Las Vegas Sands aims to capitalize on the likely structural growth in Macao in the coming years to stay ahead of the curve in terms of the quality and scale of its product and amenities. The company anticipates the projects to boost its strategic position and competitiveness across multiple segments, enabling growth in its retail business and meetings, incentive, convention and exhibitions (MICE) space.
Concerns
The Gaming industry is currently grappling with the coronavirus crisis and Las Vegas Sands isn’t immune to the trend. During third-quarter 2022, the company’s results were impacted by dismal guest visitation owing to travel-related restrictions in Shanghai, Hong Kong, Guangdong and Macao. This and the suspension of the company’s ferry operations (between Macao and Hong Kong) added to the downside. Although casinos in Macao and Singapore are now open, visitation is still very low compared with the pre-pandemic level. The Macao recovery remains slow and it is still unclear when the market will return to the pre-pandemic level.
Some better-ranked stocks in the Zacks Consumer Discretionary sector are World Wrestling Entertainment, Inc. , OneSpaWorld Holdings Limited. (OSW - Free Report) and Manchester United plc (MANU - Free Report) .
World Wrestling Entertainment currently sports a Zacks Rank #1. WWE has a trailing four-quarter earnings surprise of 25.2%, on average. The stock has increased 78.9% in the past year.
The Zacks Consensus Estimate for WWE’s 2023 sales and earnings per share (EPS) indicates a rise of 4.9% and 10.7%, respectively, from the year-ago period’s estimated levels.
OneSpaWorld currently sports a Zacks Rank #1. OSW has a trailing four-quarter earnings surprise of 84.1%, on average. Shares of OSW have increased 6% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates a rise of 24.2% and 91%, respectively, from the year-ago period’s levels.
Manchester currently sports a Zacks Rank #1. MANU has a trailing four-quarter earnings surprise of 34.4%, on average. Shares of MANU have gained 70.3% in the past year.
The Zacks Consensus Estimate for MANU’s 2024 sales and EPS indicates a rise of 11.4% and 27.8%, respectively, from the year-ago levels.
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Here's Why Investors Should Retain Las Vegas Sands (LVS) Stock
Las Vegas Sands Corp. (LVS - Free Report) is likely to benefit from the strong business model, revenue diversification efforts and expansion initiatives. Also, the emphasis on sales-building initiatives to boost non-gaming revenues in Macau bodes well. However, a decline in traffic from pre-pandemic levels is a concern.
Let us discuss the factors that highlight why investors should retain the stock for the time being.
Factors Likely to Drive Growth
Shares of Las Vegas Sands have gained 39.2% in the past three months compared with the industry’s 14.9% growth. The company is benefiting from a solid business model, extensive non-gaming revenue opportunities, high-quality assets and attractive property locations. The strong portfolio has somewhat aided the company in countering the economic downturn in China.
Image Source: Zacks Investment Research
Las Vegas Sands is quite confident about its growth opportunity in Singapore. Despite the coronavirus crisis, the company announced that it would continue to invest in the expansion of Marina Bay Sands, Singapore, to reinforce its dominant position in the region. During third-quarter 2022, the company reported accelerated recovery in its Singapore business backed by improvement in airlift activities and relaxation of pandemic-related restrictions. The company emphasized on increasing its investment in the Singapore market and boosting offerings throughout 2022 and 2023. It anticipates demand in Singapore to be robust after travel and tourism spending return to normal.
The company is optimistic about Macao’s recovery. During the third quarter, the region appeared resilient owing to strong customer demand and robust spending at the premium mass level from the gaming and retail perspective. With the easing of restrictions and recovery in travel and tourism, the company anticipates generating strong positive cash flows from the region in the days ahead.
Las Vegas Sands’ diversification efforts in Macao are quite encouraging. The company has invested more than $13 billion in Macao since 2004, consistently contributing to Macao's diversification and appeal as a business and leisure tourism destination. The company announced that it would proceed with its $2.2-billion investment to strengthen its position in Macao. During the third quarter, the company announced that its investments in Macao were approaching completion. It anticipates Four Seasons Londoner to drive growth prospects in both the premium and mass customer segments as the market continues to recover.
Backed by these investments, Las Vegas Sands aims to capitalize on the likely structural growth in Macao in the coming years to stay ahead of the curve in terms of the quality and scale of its product and amenities. The company anticipates the projects to boost its strategic position and competitiveness across multiple segments, enabling growth in its retail business and meetings, incentive, convention and exhibitions (MICE) space.
Concerns
The Gaming industry is currently grappling with the coronavirus crisis and Las Vegas Sands isn’t immune to the trend. During third-quarter 2022, the company’s results were impacted by dismal guest visitation owing to travel-related restrictions in Shanghai, Hong Kong, Guangdong and Macao. This and the suspension of the company’s ferry operations (between Macao and Hong Kong) added to the downside. Although casinos in Macao and Singapore are now open, visitation is still very low compared with the pre-pandemic level. The Macao recovery remains slow and it is still unclear when the market will return to the pre-pandemic level.
Zacks Rank & Key Picks
Las Vegas Sands’ currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Consumer Discretionary sector are World Wrestling Entertainment, Inc. , OneSpaWorld Holdings Limited. (OSW - Free Report) and Manchester United plc (MANU - Free Report) .
World Wrestling Entertainment currently sports a Zacks Rank #1. WWE has a trailing four-quarter earnings surprise of 25.2%, on average. The stock has increased 78.9% in the past year.
The Zacks Consensus Estimate for WWE’s 2023 sales and earnings per share (EPS) indicates a rise of 4.9% and 10.7%, respectively, from the year-ago period’s estimated levels.
OneSpaWorld currently sports a Zacks Rank #1. OSW has a trailing four-quarter earnings surprise of 84.1%, on average. Shares of OSW have increased 6% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates a rise of 24.2% and 91%, respectively, from the year-ago period’s levels.
Manchester currently sports a Zacks Rank #1. MANU has a trailing four-quarter earnings surprise of 34.4%, on average. Shares of MANU have gained 70.3% in the past year.
The Zacks Consensus Estimate for MANU’s 2024 sales and EPS indicates a rise of 11.4% and 27.8%, respectively, from the year-ago levels.