On Thursday, Stifel adjusted its outlook on Las Vegas Sands Corp (NYSE:LVS), reducing the price target to $65 from the previous $70 while retaining a Buy rating on the stock. The firm anticipates that the first quarter of 2024 may serve as a pivotal moment for the company.
Despite low investor expectations surrounding Macau for various reasons, the firm believes that Las Vegas Sands has significantly reduced its risk for the remainder of 2024 and into early 2025. This is largely due to ongoing construction disruptions that are expected to continue affecting the company's market share and profit margins.
The firm noted that Las Vegas Sands might experience a dip in share value in the short term, as investors with a focus on shorter durations might withdraw and await greater clarity on when the erosion of market share and margins will decelerate. However, Stifel recommends that investors with a longer-term perspective consider using any near-term share price declines as an opportunity to purchase shares in Las Vegas Sands.
Stifel's analysis suggests that the market may be underestimating the overall potential of the Macau market and placing too much emphasis on immediate shifts in market share. Despite the challenges, the firm remains optimistic about the value of Las Vegas Sands' operations in Singapore, which they consider to be significantly undervalued.
The firm also highlighted that the management of Las Vegas Sands has expressed a strong commitment to share buybacks at current price levels. This strategy is seen as a sign of confidence from the company's leadership in the intrinsic value of their shares and their future prospects.
InvestingPro Insights
Adding to the recent analysis by Stifel, Las Vegas Sands Corp (NYSE:LVS) showcases a robust financial profile according to InvestingPro data. The company's gross profit margin impresses at 77.13% for the last twelve months as of Q1 2024, signaling efficient operations and strong pricing power. This aligns with Stifel's confidence in the company's value, particularly in its Singapore operations, which are deemed significantly undervalued.
Investors should note that Las Vegas Sands is trading at a high Price / Book multiple of 9.16 and a forward P/E ratio of 23.76, suggesting a premium valuation in the market. This could be reflective of the company's quality and the anticipated profitability, as analysts predict Las Vegas Sands will be profitable this year.
For those looking to delve deeper into Las Vegas Sands' investment potential, there are additional InvestingPro Tips available, including insights on revenue valuation multiples and price movements. Readers can access these tips and get an additional 10% off a yearly or biyearly Pro and Pro+ subscription with the coupon code PRONEWS24. As of now, there are 5 more InvestingPro Tips listed for Las Vegas Sands, offering a comprehensive investment perspective.
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