Casino operator Las Vegas Sands (NYSE:LVS) stock has fallen toward its COVID-19 lows. The casino operator continues to see uncertainty grow in its Macao operations affected by China’s zero-tolerance COVID policy. There are also fears of regulatory changes that further the crackdown on corruption and give more government oversight of the industry.
Keep in mind that casino gambling is illegal in mainland China. Macao is the only Chinese city allowed to operate a casino. Mainland visitors must obtain a visa to travel to Macao to gamble. Headwinds from COVID lockdowns, travel restrictions, and government regulatory changes have created a perfect storm of negativity for investors.
The Company seeks to bolster operations in other Asian countries, including a $1 billion renovation of its MBS luxury resort in Singapore. It also seeks to drive growth with the establishment and reopening of its video terminal lottery (VTLs).
The China zero-COVID policy has resulted in border controls with 25 Chinese provinces, which could further delay past the Labor Day holidays in China. Prudent investors can watch for opportunistic pullbacks ahead of a rebound in shares of Las Vegas Sands.
Q4 Fiscal 2021 Earnings Release
On Jan. 26, 2022, Las Vegas Sands reported it's fiscal Q4 2021 earnings for the quarter ended in December 2021. The Company reported an earnings-per-share loss of (-$0.22), beating consensus analyst estimates by $0.01. Revenues fell (-12.04%) year-over-year (YoY) to $1.01 billion but still missed analyst expectations by (-$77.70 million).
Las Vegas Sands CEO Robert G. Goldstein commented,
"We remain confident in the eventual recovery in travel and tourism spending across our markets and enthusiastic about the opportunity to welcome more guests back to our properties in 2022 and the years ahead. While pandemic-related travel restrictions continue to impact our current financial performance, we again generated positive EBITDA in each of our markets.
We remain deeply committed to supporting our team members and to helping those in need in each of our local communities as they recover from the impact of the pandemic."
Conference Call Takeaways
CEO Goldstein kept his comments brief. He updated analysts that the Company is still affected by pandemic-related travel restrictions but managed to generate positive EBITDA in Macao and Singapore. The Londoner construction is near completion and will help drive growth and its Four Seasons property in premium and mass customer segments.
The Company has the “largest footprint in the world’s greatest market, Macao.” He states that customer demand has been resilient despite headwinds in both gaming and retail. He continues to be optimistic that the Company will return to pre-pandemic levels once visitation returns.
The Asian portfolio is composed mainly of Macao and Singapore. He concluded, “The sale of Las Vegas creates liquidity and optionality as we pursue additional large-scale, land-based destination resorts in the U.S. and Asia. And we continue to build our digital presence.
We are exploring multiple opportunities, and we will provide some color at the appropriate time.” CEO Goldstein addresses the topic of Singapore in the Q&A session. He believes Singapore will get its VTLs first within 1H 2022.
Demand is strong, and the government appears to be positive about the prospects. VTLs were very strong until Omicron hit and crushed the momentum. He also sees more source markets opening up in Japan, Korea, Malaysia, and Indonesia.
LVS Price Trajectories
Using the rifle charts on the weekly and daily times frames enable a precision view of the price action for LVS stock. The weekly rifle chart peaked near the $47.72 Fibonacci (fib) level before falling sharply to $31.26 before staging a bounce. The weekly downtrend has a 5-period moving average (MA) resistance at $37.61, followed by the weekly 15-period MA resistance at $41.00. The weekly 50-period MA is falling at $42.84 resistance. The weekly lower Bollinger Bands (BBs) are stalled at $31.04.
The weekly stochastic is stalled by attempting to form a mini inverse pup on the recent flush back under the weekly 5-period MA. The weekly market structure low (MSL) buy triggers a breakout through $39.80. The daily rifle chart has been in consolidation as the daily BBs have been compressing until now. The daily 5-period MA sits at $37.40 flat, and the 15-period MA sits at $37.11. The daily 50-period MA is falling at $39.81, and the 200-period MA is at $40.37. The daily lower BBs are starting to expand at $33.55.
The daily stochastic coiled to the 50-band but has stalled for either a cross back down or a mini pup with daily upper BBs at $41.77. Prudent investors can watch for opportunistic pullback levels at the $33.75, $32.55 fib, $30.29, $27.84, $26.01 fib, $24.50, and $22.89 price level. Upside trajectories range from the $41.91 fib level up towards the $55.73 fib level.