By Emily Dattilo
Shares of Las Vegas Sands were falling sharply as a revenue miss in a key market overshadowed an earnings beat.
The casino and resort operator's stock was down 8% to $46.23 in Thursday trading, on track for its largest drop since Oct. 24, 2022, according to Dow Jones Market Data. It was also the worst performer in the S&P 500, which was up 0.3% at midday.
On Wednesday, the casino company posted first-quarter adjusted earnings of 75 cents a share, beating Wall Street's call for 62 cents, according to FactSet.
Net revenue of $2.96 billion arrived above the consensus call for $2.94 billion and rose from the $2.12 billion recorded in the year-ago quarter. Revenue within Macao operations of $1.81 billion, however, fell short of the $1.94 billion analysts had penciled in.
"In Macau, Sands continues to face some share loss, partly due to disruption caused by redevelopment work at The Londoner and the closure (for renovation of the 15,000 seat arena)," Seaport Research Partners analyst Vitaly Umansky wrote on Thursday.
"While the next few quarters will see some disruption, we anticipate Sands to begin winning back some market share during the course of the year and into next year as refocus on marketing takes center stage, especially with the Londoner," he continued. Seaport rates LVS at Buy with a price target of $63.
J.P. Morgan analysts led by Joseph Greff also believe it could take some time for business in Macau to improve. The team pulled back their price target to $55 from $59 and reiterated an Overweight rating on Wednesday.
And finally, Mizuho Securities analysts Ben Chaiken and Alok Patel offered a wider perspective. There are a lot of moving pieces to the earnings report, they acknowledged, but overall, Wall Street should dial back estimates for 2024 and possibly 2025.
That said, they remain upbeat on the stock due to "exceptional results" in Singapore and falling capital expenditures, among other reasons. Mizuho cut their price target to $65 from $70 but maintained a Buy rating on Wednesday.
Gambling stock peers were trading mixed on Thursday, with DraftKings slipping 1%, MGM Resorts International 1.2% higher, Caesars Entertainment gaining 0.6%, Wynn Resorts off 0.8%, and PENN Entertainment climbing 1.1%.
Write to Emily Dattilo at emily.dattilo@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 18, 2024 12:44 ET (16:44 GMT)
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