Las Vegas Sands stock (NYSE: LVS), a casino and resort company operating in Macau and Singapore, fell 9% since the beginning of 2024 (as of Jan 16), as compared to a 24% increase in the S&P 500 index. LVS’s peer Wynn stock(NASDAQ: WYNN) also went down 8% during the same period. The impact of the pandemic has started to recede, with Las Vegas Sands witnessing a recovery in key markets driven by pent-up demand and a resurgence in tourism spending from Chinese travelers. However, despite this progress, the company’s financial performance has yet to fully recover, with key metrics still lagging behind pre-pandemic levels. Another casino company is down 30% since 2024. See Can MGM Stock Make A Comeback To Its Pre-Inflation High Of $50?
China’s government has unveiled plans to inject approximately 1 trillion yuan (~$142 billion) into its largest state-owned banks as part of a broader stimulus package aimed at revitalizing the country’s struggling economy. By making this strategic move, the banks will be able to support China’s economy, which has been facing shrinking margins, faltering profits, and a rise in bad loans in recent years. A key beneficiary of China’s economic stimulus efforts is likely to be Macau, which is poised for a significant surge in tourism in 2025. Visitor numbers are forecast to reach approximately 36 million, driven in part by the expansion of Beijing’s Individual Visitor Scheme. The scheme, which was broadened to include eight additional mainland cities in May 2024, is expected to fuel a substantial increase in tourist arrivals from mainland China. As of the most recent quarter, Las Vegas Sands has achieved a recovery of approximately 93% in Macau’s visitation compared to its 2019 third-quarter levels.
In anticipation of this influx of visitors, Macau’s casinos are investing in innovative technologies and new gaming offerings designed to enhance the overall gaming experience and capitalize on growing demand. These investments include the introduction of smart tables and enhanced baccarat side bets, which are expected to help Macau’s casinos maintain their competitive edge in the region. Separately, if you want upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.
In the first nine months of 2024, LVS’ revenue increased 13% y-o-y to $8.4 billion. Las Vegas Sands reported a 14% y-o-y increase in the Macau market and 11% growth in Singapore during this period. Its consolidated adjusted property EBITDA was $3.3 billion compared to $2.9 billion a year ago. The casino company said the Marina Bay Sands property delivered $1.5 billion in adjusted property EBITDA during the quarter and Macao operations contributed $1.8 billion in the first nine months of 2024. In addition, the company’s earnings per share came in at $1.51, up 39% y-o-y. We presently estimate Las Vegas Sands’ valuation to be around $50 per share, about 5% ahead of the current market price.
Las Vegas Sands has achieved significant milestones in its development projects. The company successfully launched the Londoner Grand in Macau and introduced the first 300 Londoner Grand Suites, with additional suites planned for release in the coming quarters. In Singapore, renovation efforts are ongoing, with room upgrades and casino floor enhancements expected to be completed by mid-2025. Meanwhile, Las Vegas Sands has also submitted a proposal for a $5 billion casino resort in Nassau County, Long Island, marking its bid to enter the New York market.
Overall LVS stock performance over the last 4-year period has been far from consistent, with annual returns being more volatile than the S&P 500. Returns for the stock were -37% in 2021, 28% in 2022, 3% in 2023, and 6% in 2024. The Trefis High Quality Portfolio, with a collection of 30 stocks, is much less volatile. And it has comfortably outperformed the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.
It is helpful to see how its peers stack up. Check out how LVS’ Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.
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