Las Vegas Sands To Benefit From Macau's Recovery, Offers 'Compelling' Opportunity: Analyst

Shares of Las Vegas Sands Corp. LVS climbed in early trading on Tuesday, amid news of Macau recovering.

The company should benefit from the "mass recovery" in the Macau market, according to Mizuho Securities.

The Las Vegas Sands Analyst: Ben Chaiken initiated coverage of Las Vegas Sands with a Buy rating and a price target of $70.

The Las Vegas Sands Thesis: While business is recovering in Macau, large areas of China remain “well below” the 2019 levels, with air and rail infrastructure yet to return to the pandemic levels, Chaiken said in the initiation note.

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“We believe the play from these cities is predominately mass-oriented; as a result, LVS should benefit as the largest operator in Macau with a skew towards mass-market customers,” the analyst wrote.

While the company has made strategic investments in Macau and Singapore, the Street estimates “do not appear to include any earnings acceleration” from these, he added.

Las Vegas Sands presents “a compelling return on capital opportunity,” Chaiken stated. Free cash flow expectations suggest that, after dividends, the company could “repurchase >20% of shares over the next three years, without impacting leverage."

LVS Price Action: Shares of Las Vegas Sands had risen by 1.77% to $51.20 at the time of publication on Tuesday.

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