Yahoo Finance Las Vegas Sands (LVS) Macao Visits Aid, COVID Woes Linger
Las Vegas Sands Corp. LVS is benefiting from improving property visitation, gaming volumes, retail sales and hotel occupancy in the Macao region. Improvement in airlift activities and relaxation of pandemic-related restrictions in Singapore and LVS’ solid portfolio add to growth.
Recently, LVS reported its fourth-quarter 2022 results wherein adjusted loss (earnings) declined 13.6% and revenues increased 10.8% on a year-over-year basis. The abovementioned growth drivers backed the uptrend of the company.
Shares of LVS have gained 33.8% over the past six months compared with the Zacks Gaming industry’s growth of 23.9%.
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However, the growth of this international developer of multi-use integrated resorts is being restricted by persisting coronavirus-related risks and tough market competition.
Earnings estimates for 2023 have moved south to $1.40 per share from $1.45 over the past 30 days, depicting analysts' concern over the company's growth prospects.
Let’s delve deeper and analyze the factors.
Tailwinds
Las Vegas Sands is optimistic about Macao’s recovery as it witnessed significant improvement in its business in fourth-quarter 2022. The region appeared resilient on the back of strong customer demand and robust spending at the premium mass level from the gaming and retail perspectives. With the easing of restrictions and recovery in travel and tourism, the company anticipates strong positive cash flows from the region in the days ahead.
Also, LVS is confident about its growth prospects in Singapore, which is one of the top spots for gambling. During fourth-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 on increasing its investment in the Singapore market and boosting offerings throughout 2023. It anticipates demand in Singapore to be robust after travel and tourism spending return to normal.
Las Vegas Sands’ solid business model, extensive non-gaming revenue opportunities, high-quality assets and attractive property locations aided it to withstand the economic downturn in China. With the economy recovering in the United States, the company’s business is expected to continue to grow.
Headwinds
The coronavirus pandemic affected Las Vegas Sands’ operations in 2022. Various travel restrictions, such as border closures, mandatory quarantines and proof of negative COVID-19 testing (on arrival in Macao) resulted in fluctuations in guest travel and visitation. Although the preventive measures were gradually reduced, the company stated that visitation is still very low compared with the pre-pandemic level. The Macao government announced that total visitation from mainland China to Macao and gross gaming revenues declined approximately 81.7% and 85.6%, respectively, from 2019 (pre-pandemic) levels.
Also, increased hotel openings and promotional activities have made Las Vegas and Macao markets highly competitive. Thus, excess supply, especially in the Macao market, might reduce LVS’ market share.
Zacks Rank & Key Picks
LVS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Here are some better-ranked stocks that investors may consider in the Zacks Consumer Discretionary sector.
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The Zacks Consensus Estimate for WYNN’s 2023 sales and EPS suggests growth of 43.3% and 118.8%, respectively, from the year-ago levels.
Ralph Lauren Corporation RL currently sports a Zacks Rank #1. RL delivered a trailing four-quarter earnings surprise of 23.6% on average. Its shares have rallied 23.5% in the past six months.
The Zacks Consensus Estimate for RL’s fiscal 2024 sales and EPS suggests growth of 5.5% and 14%, respectively, from the year-ago levels.
InterContinental Hotels Group PLC IHG currently carries a Zacks Rank #2 (Buy). Shares of IHG have gained 32.7% in the past six months. The long-term earnings growth rate of the company is 13.6%.
The Zacks Consensus Estimate for IHG’s 2023 sales and EPS suggests growth of 9.8% and 18.4%, respectively, from the year-ago period’s reported levels.
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Intercontinental Hotels Group (IHG) : Free Stock Analysis Report
Las Vegas Sands Corp. (LVS) : Free Stock Analysis Report
Wynn Resorts, Limited (WYNN) : Free Stock Analysis Report
Ralph Lauren Corporation (RL) : Free Stock Analysis Report
