Shares of Las Vegas Sands Corp. LVS have gained 25.3% in the past three months compared with the industry’s 21.5% growth. The company has been benefitting from an accelerated recovery in its Singapore business, relaxation of pandemic-related restrictions and a strong business model. Also, emphasis on development projects bodes well. However, a decline in traffic from pre-pandemic levels is a concern.
Let us discuss the factors that highlight why investors should retain the stock for the time being.
Factors Likely to Drive Growth
Las Vegas Sands is quite confident about its growth opportunity in Singapore. During second-quarter 2022, the company reported accelerated recovery in its Singapore business backed by opening airlift activities and relaxation of pandemic-related restrictions in the region. The company emphasized on increasing its investment in the Singapore market and boosting offerings throughout 2022 and 2023. Also, it announced that it would continue to invest in the expansion of Marina Bay Sands, Singapore, to reinforce its position in the region. It anticipates demand in Singapore to be robust after travel and tourism spending return to normal.
The company regularly evaluates opportunities to improve its product offerings and other revenue-generating additions to its Integrated Resorts. Also, it focuses on refreshing its meeting and convention facilities, suites and rooms, retail malls, restaurant and nightlife mix and gaming areas. Some notable investments include The Londoner Macao development project and The Grand Suites at Four Seasons.
The company is optimistic in this regard. It anticipates the projects to boost its strategic position and competitiveness across multiple segments, enabling growth in its retail business and meetings, incentive, convention and exhibitions (MICE) space.
Image Source: Zacks Investment Research
Las Vegas Sands, one of the leading companies in the gaming and lodging industry, has a solid business model, extensive non-gaming revenue opportunities, high-quality assets and attractive property locations. The strong portfolio has somewhat aided the company in countering the economic downturn in China. Meanwhile, with the economy recovering in the United States, the company’s business should continue to grow.
The Gaming industry is currently grappling with the coronavirus crisis and Las Vegas Sands isn’t immune to the trend. During second-quarter 2022, the company’s results were impacted by dismal guest visitation owing to travel-related restrictions in in Shanghai, Hong Kong, Guangdong and Macao. This and the suspension of the company’s ferry operations (between Macao and Hong Kong) added to the downside. Although casinos in Macao are now open, visitation is still very low compared with the pre-pandemic level. The Macao recovery remains slow and it is still unclear when the market will return to the pre-pandemic level.
Zacks Rank & Key Picks
Las Vegas Sands’ currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Consumer Discretionary sector are Marriott Vacations Worldwide Corporation VAC, Hyatt Hotels Corporation H and Choice Hotels International, Inc. CHH.
Marriott Vacations sports a Zacks Rank #1. VAC has a trailing four-quarter earnings surprise of 13.9%, on average. The stock has declined 6% in the past year.
The Zacks Consensus Estimate for VAC’s current financial year sales and earnings per share (EPS) indicates an increase of 19.7% and 131.4%, respectively, from the year-ago period’s reported levels.
Hyatt carries a Zacks Rank #2 (Buy). H has a trailing four-quarter earnings surprise of 798.8%, on average. The stock has increased 24% in the past year.
The Zacks Consensus Estimate for H’s current financial year sales and EPS indicates growth of 89.1% and 13%, respectively, from the year-ago period’s reported levels.
Choice Hotels carries a Zacks Rank #2. CHH has a trailing four-quarter earnings surprise of 11.2%, on average. The stock has declined 3.7% in the past year.
The Zacks Consensus Estimate for CHH’s current financial year sales and EPS indicates growth of 25.3% and 21.7%, respectively, from the year-ago period’s reported levels.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Hyatt Hotels Corporation (H) : Free Stock Analysis Report
Las Vegas Sands Corp. (LVS) : Free Stock Analysis Report
Choice Hotels International, Inc. (CHH) : Free Stock Analysis Report
Marriot Vacations Worldwide Corporation (VAC) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research