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Las Vegas Sands (LVS) Q4 Earnings: A Beat in the Cards?

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Las Vegas Sands Corp. LVS is slated to report fourth-quarter 2016 numbers on Jan 25, after market close. We expect the casino operator to beat expectations.

In the last reported quarter, Las Vegas Sands posted a 22.03% positive earnings surprise.

Let’s see how things are shaping up for this announcement.

Las Vegas Sands Corp. Price and EPS Surprise


Las Vegas Sands Corp. Price and EPS Surprise | Las Vegas Sands Corp. Quote

Why a Likely Positive Surprise?

Our proven model shows that Las Vegas Sands is likely to beat on earnings because it has the perfect combination of the two key ingredients.

Zacks ESP: Earnings ESP for Las Vegas Sands stands at +4.62% because the Most Accurate estimate is 68 cents while the Zacks Consensus Estimate is pegged lower at 65 cents. A favorable Earnings ESP serves as a meaningful indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Las Vegas Sands currently carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.

The combination of Las Vegas Sands’ Zacks Rank #3 and +4.62% Earnings ESP makes us reasonably confident of an earnings beat.

What is Driving the Better-than-Expected Earnings?

Per the Macau Gaming Inspection and Coordination Bureau, gross gaming revenues (GGR) rose in all the three months of the quarter, thereby continuing the revival in Macau.

Hence, the company’s Macau portfolio is experiencing strong visitation on the back of an improved operating environment along with Las Vegas Sands’ market-leading hotel, retail and entertainment offerings. Particularly, the opening of Las Vegas Sands’ subsidiary, Sands China Ltd.’s The Parisian (opened on Sep 13), continues to attract tourists and leisure gamblers, and thus drive the quarter’s revenues.

Also, the company’s consistent efforts to boost tourism and traffic in Macau have started to bear fruit as evident from the strong third-quarter 2016 results. We thus expect the momentum to continue in Q4 propelled by new resort addition and provision of better non-gaming options.

However, the results may be somewhat hampered as the anti-graft corruption drive undertaken by the Chinese government is still keeping VIP gamblers at bay.

Meanwhile, the company’s focus on renovation and promotion of its Las Vegas properties should lead to high occupancy rates and continue driving segmental performance.

Other Stocks to Consider

Las Vegas Sands is not the only company looking up this earnings season. Here are some other companies to consider as our model shows they too have the right combination of elements to post an earnings beat this quarter:

MGM Resorts International MGM has an Earnings ESP of +50.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Peak Resorts, Inc. SKIS has an Earnings ESP of +10.71% and a Zacks Rank #3.

Time Warner Inc. has an Earnings ESP of +2.52% and a Zacks Rank #3.

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