Did Las Vegas Sands Q2 Earnings Disappoint? It Depends Which Analyst You Ask

The newly published second-quarter earnings report from Las Vegas Sands Corporation LVS presented a glass-half-full/glass-half-empty consideration from a pair of leading analysts.

The company announced Wednesday second-quarter revenue of $1.17 billion, up from $98 million one year earlier but short of consensus forecasts, as well as reporting a loss of $192 million. On a per-share basis, company recorded a loss of 25 cents; adjusted for discontinued operations, the loss was 26 cents per share.

The View From Morgan Stanley: Analyst Thomas Allen has an Equal-weight rating on Las Vegas Sands and lowered the price target from $58 to $53.

“We are lowering our estimates to reflect what is clearly a choppier recovery in both Macau and Singapore,” he wrote, referring to the gaming company’s Pacific Rim destinations. “Our 2021e EBITDA drops 40% and 2022e 8%.”

Allen stated he would readjust his estimates based on the company’s earnings call, citing the situations in Macau and Singapore being “worse than expected” due to COVID-19-related travel restrictions and suggesting the “need to model a slower recovery.”

Allen also noted that the company’s announced sale of the Venetian Resort Las Vegas and the Sands Expo and Convention Center for approximately $6.25 billion offset what could have been a lower drop for the price target, adding “we expect that property to perform better than we did before reducing LVS' guarantee payment.”

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The View From Credit Suisse: Analyst Benjamin Chaiken has an Outperform rating and a price target of $69.

Chaiken acknowledged the company’s $244-million property EBITA in the second quarter was below the $290-million Street expectations, but he observed “but with market turmoil due to COVID and the fluctuating travel situation in China, we don’t think there was necessarily a bar that needed to be reached.”

Despite the current challenges, Chaiken stressed that Las Vegas Sands was “best situated among its peers to capture the mass recovery in Macau” and predicted its operations in that market could return to pre-COVID-19 levels and perhaps better by in 2023.

He also highlighted that the sale of the company’s Las Vegas assets resulted in having “plenty of dry powder for other tactical M&A down the line which adds optionality,” speculating that new casino developments in Florida or Texas or the company’s recently announced online gaming venture could be in the cards.

LVS Price Action: At last check, Las Vegas Sands was trading at $47.91, somewhat closer to its 52-week low of $42.58 than to its 52-week high of $66.76.

Photo: Greg Montani/Pixabay.