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Las Vegas Sands Corp. Message Board

  • b_salming b_salming Feb 13, 2013 11:41 AM Flag

    Las Vegas Sands Top Gaming Pick, UBS Says, Macau Mass Market Key

    February 13, 2013, 10:53 A.M. ET.
    By Ben Levisohn
    UBS analyst Robin Farley recently met with Las Vegas Sands (LVS) management–and came away liking what she saw. Her key takeaways:

    Sands remains positioned to take market share in Macau from competitors like Melco Crown Entertainment (MPEL), MGM Resorts International (MGM) and Wynn Resorts (WYNN) with both high rollers and mass-market gamblers. The mass market, however, will be key. She writes:

    As VIP gets more competitive in the market, LVS is the only operator to have the “real estate” in terms of tables and rooms to comp to effectively be able to go after mass and premium mass as well as VIP between now and ‘15….Since not every operator has capacity to pursue premium mass, we expect competition in that segment to remain more rational than VIP. We believe the ramp-up of hotel rooms/table ratio will drive LVS outperformance.

    But it’s not all about Macau. Also driving the stock will be the potential for the company to raise its dividend, as highlighted by Lazard’s analysts in January. Farley believes Sands can grow its dividend in “consistent increments” of about 20%, after 2013′s 40% dividend hike–with most of the increase coming from Sands China’s dividend. “We believe the [company] has room to pay the $1.2B in annual [dividends] we [estimate] for ’13 and still have powder dry to commit equity to a major new project or two should,” she says.

    Farley maintained her buy rating on the stock and a $59 price target. LVS has gained 0.9% to $54.18 today.

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    • Good post. Worth a read for those who missed it!

      * Sands remains positioned to take market share in Macau from competitors like (MPEL), (MGM), and (WYNN) with both high rollers and mass-market gamblers.

      * LVS is the only operator to have the “real estate” in terms of tables and rooms to comp to effectively be able to go after mass and premium mass as well as VIP between now and 2015.

      * Farley believes Sands can grow its dividend in “consistent increments” of about 20% per year.

      * We believe the [company] has room to pay the $1.2B in annual [dividends] we [estimate] for ’13 and still have powder dry to commit equity to a major new project or two.

      Sentiment: Strong Buy

 
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