Las Vegas Sands (LVS) Up 29% in 6 Months: Can the Upside Last?


Shares of Las Vegas Sands Corp. (LVS - Free Report) have gained 28.8% in the past six months compared with the industry’s growth of 9.4%. The company is benefiting from an increase in visitation, growth prospects in Singapore and investments in Macao. However, high debt and slow Macao recovery remain a concern. Let’s delve deeper.

Growth Drivers

The company is optimistic about Macao’s recovery. During the quarter, the region appeared resilient on the back of 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 is quite confident about its growth prospects in Singapore, which is one of the top spots for gambling. Despite the coronavirus pandemic, 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 in the region.

The company emphasized increasing its investments 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.

Las Vegas Sands, one of the leading companies in the gaming and lodging industry, has 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 withstanding the economic downturn in China. Meanwhile, with the economy recovering in the United States, the company’s business should continue to grow.


The coronavirus pandemic affected the company’s operations in the third quarter of 2022. The company’s results in the quarter 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. During the third quarter of 2022, the company stated that visitation in Singapore declined 55.9% from 2019 levels. It also revealed that Macao’s recovery remains slow and it is still unclear when the market will return to the pre-pandemic level.

Maintaining liquidity has become an arduous task for most companies during the coronavirus outbreak. As of Sep 30, 2022, the company had a total debt of $15.27 billion compared with $15.35 billion at the end of Jun 30, 2022. As of Sep 30, 2022, the unrestricted cash balance amounted to $5.84 billion compared with $6.45 billion in the previous quarter.

Debt-to-capitalization ratio at the end of the third quarter came in at 80.2% compared with the 78.5% reported in the previous quarter. This suggests difficulty in managing high debt levels.

Zacks Rank & Key Picks

The company currently has 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 Consumer Discretionary sector are Hyatt Hotels Corporation (H - Free Report) , Crocs, Inc. (CROX - Free Report) and Boyd Gaming Corporation (BYD - Free Report) .

Hyatt currently sports a Zacks Rank #1. H has a trailing four-quarter earnings surprise of 652.3% on average. The stock has improved 14.2% in the past year.

The Zacks Consensus Estimate for H’s current financial year sales and EPS indicates a surge of 92.6% and 121.8%, respectively, from the year-ago period’s reported levels.

Crocs currently carries a Zacks Rank #2 (Buy). CROX has a long-term earnings growth rate of 15%. Shares of Crocs have declined 47.5% in the past year.

The Zacks Consensus Estimate for CROX’s 2022 sales and EPS indicates a rise of 51.5% and 23.7%, respectively, from the year-ago period’s levels.

Boyd Gaming carries a Zacks Rank #2. BYD has a long-term earnings growth rate of 12.8%. The stock has declined 4.4% in the past year.

The Zacks Consensus Estimate for BYD’s 2022 sales and EPS indicates growth of 4.4% and 11.9%, respectively, from the year-ago period’s reported levels.

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