This casino stock is beating the market. Goldman Sachs says more gains to come
Goldman Sachs believes that sustained strong performance from customers in Asia will continue driving shares of Las Vegas Sands higher. The bank upgraded the casino operator to buy from neutral. Analyst Lizzie Dove also lifted her price forecast to $80 from $64, which points to a 23% gain. Dove cited a “sustainable” acceleration in Macao’s gross gaming revenue. This has been supported by a busy event schedule, a stronger Chinese yuan, weakening visa restrictions for residents in nearby Chinese provinces, rising tourism preference for Macao and a rising Chinese stock market. LVS YTD mountain LVS YTD chart “As the market has shown signs of sustained growth, LVS has increased its promotionality and adjusted its reinvestment rates for high-end premium mass customers to bring it more in line with its peers, following comments by outgoing LVS CEO Rob Goldstein’s earlier this year stating that LVS needs to be more aggressive on direct incentives to the customer,” Dove wrote. The Singapore market also appears to be “firing on all cylinders.” Dove believes that the country’s gross gaming revenue is expected to reach all-time highs in 2025, exceeding pre-COVID levels by around 50%, she wrote. Dove added that several quarters of robust EBITDA growth and solid execution have shown the company’s ability to sustain annual EBITDA in the high $2 billion to low $3 billion range. “We also believe that IR2 — the $8bn development which will be adjacent to Marina Bay Sands — has the potential to contribute significant EBITDA to LVS over the long term, allowing LVS to capture an increasing share of the VIP and premium mass market in Singapore,” Dove said. Las Vegas Sands should continue with its trend of solid capital returns, per the analyst. Dove estimates that Las Vegas Sands should continue to sustain around $2 billion of annual share repurchases, even as it continues investing significant amounts of capital in its Marina Bay Sands expansion. The stock has risen approximately 27% this year, beating the S & P 500’s 16% advance in that time.
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