On Tuesday, JPMorgan adjusted its outlook for Las Vegas Sands Corp (NYSE:LVS), increasing the price target to $60 from the previous $53 while maintaining an Overweight rating on the stock. The firm's analysis suggests a positive trend for the company's earnings before interest, taxes, depreciation, and amortization (EBITDA), particularly in its Macau properties.
The revised EBITDA estimate for the Macau properties in the third quarter of 2024 is now $572 million, a modest increase from the earlier projection of $556 million. This adjustment is based on the assumption that Las Vegas Sands' gross gaming revenue (GGR) market share remained stable at around 24%, mirroring its second-quarter performance. The new forecast reflects a smaller sequential decline in Macau GGR of 1.5%, compared to the previously expected 3.0% drop.
In contrast, the EBITDA estimate for the Marina Bay Sands property for the same quarter has been slightly reduced to $508 million from $512 million. This change accounts for disruptions due to room renovations. However, expectations for the fourth quarter of 2024 are for an increase in EBITDA.
JPMorgan's confidence in Las Vegas Sands is further bolstered by the anticipation of reduced disruptions from renovations at the Londoner property in Macau. The newly renovated casino is now open, with additional hotel rooms and revenue-generating features expected to launch in a staggered fashion throughout the fourth quarter of 2024 and into 2025. These developments are projected to drive growth above that of Las Vegas Sands' Macau peers in 2025.
The strong performance during the Golden Week and upcoming investor events in Singapore this November and in Macau in spring next year are also seen as positive indicators. These events are expected to increase investor visibility and help normalize the company's valuation multiple, which is considered undemanding.
JPMorgan's outlook for Las Vegas Sands includes a mid-teens growth rate in Macau for 2025, with EBITDA projections around $2.8 billion. The firm also highlights the company's consistent share buybacks, ranging from $400 to $500 million per quarter, and the attractive market in Singapore, which is expected to grow by approximately 7% in 2025 following mid-teens growth in 2024. This growth is anticipated to be supported by capital expenditures and expansion in the Singapore market.
In other recent news, Las Vegas Sands Corp is undergoing notable changes and developments. The company's second-quarter results did not meet expectations due to disruptions from renovations in Macau and Singapore. Despite this, Macquarie maintained its Outperform rating on the company, citing long-term benefits from the renovations. Stifel also maintained a Buy rating for Las Vegas Sands Corp despite concerns about the company's operations in Macau.
Meanwhile, CFRA downgraded shares of Las Vegas Sands Corp from Buy to Hold, adjusting the price target to $51 from the previous $55. The revision reflects a cautious stance on the stock's future performance, taking into account the company's reliance on the Macao and Asia markets.
On the other hand, Wells Fargo anticipates Las Vegas Sands Corp to have an attractive fourth quarter. Also, Mizuho Securities increased the price target for Las Vegas Sands Corp to $52, maintaining an "Outperform" rating on the stock. The company also reported a 24% increase in total gaming revenues in its Macau operations and is exploring new development opportunities in markets such as New York, Texas, and Thailand.
Meanwhile, Myriad Genetics (NASDAQ:MYGN) recently reported second-quarter revenues of $211.5 million, exceeding consensus expectations, and raised its 2024 guidance to an estimated $835-845 million. The company's main product, the MyRisk hereditary cancer panel, is expected to account for approximately 44% of the company's sales for 2023. Myriad Genetics also secured a new patent for its molecular residual disease assay technology.
InvestingPro Insights
Las Vegas Sands Corp's recent performance aligns with JPMorgan's optimistic outlook. According to InvestingPro data, the company's revenue growth stands at an impressive 68.48% over the last twelve months, with a strong EBITDA growth of 137.26% during the same period. This robust financial performance supports JPMorgan's projections for continued growth in Macau and Singapore.
InvestingPro Tips highlight Las Vegas Sands' impressive gross profit margins, which is reflected in the data showing a gross profit margin of 76.91% for the last twelve months. This strong profitability metric underscores the company's operational efficiency, particularly in its high-margin casino operations.
Additionally, the company's liquid assets exceeding short-term obligations, as noted in another InvestingPro Tip, suggests a solid financial position to support ongoing renovations and expansions mentioned in JPMorgan's analysis. This financial stability is crucial for executing the growth strategies outlined in the article.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Las Vegas Sands, providing a deeper understanding of the company's financial health and market position.
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