What To Expect From Las Vegas Sands In Q3

by Trefis Team
Las Vegas Sands
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Las Vegas Sands (NASDAQ: LVS) is scheduled to announce its Q3 2018 results on Wednesday, October 24. Consensus market estimates call for the company to report revenue of just over $3.4 billion and adjusted EPS of 81 cents. The company has reported strong revenue growth in the first half of 2018 from Macau, driven by the recovery of the gaming industry in the region, coupled with robust growth in both mass market and VIP games. However, slower than expected growth in Macau as a result of hurricanes, a weak VIP market, and slowing Chinese economy sentiment should slightly dampen its Q3 results. Despite this, we expect the holiday season in Q4 to drive its full year results. Additionally, we expect the company to benefit from suite additions at the Parisian Macau, St Regis and Four Seasons properties, and the renovation of VIP gaming areas at the Venetian and Plaza Macau. Below we take a look at what to expect from LVS in Q3.

We have a $79 price estimate for Las Vegas Sands, which is substantially higher than the current market price. The charts have been made using our new, interactive platform. You can click here for our dashboard on Our Outlook For Las Vegas Sands In Q3 to modify different drivers, and see their impact on the revenue, earnings, and price estimate for Las Vegas Sands.

Factors Driving Near Term Growth

Macau enjoyed a strong first half of 2018, as margins improved as a result of robust revenue growth due to the casino industry rebound in the region. Although the gross gaming revenues (GGR) in Macau remained strong (grew by nearly 19% y-o-y) in the first half of 2018, it has slowed down since May, losing some of its early momentum due to the FIFA World Cup, resulting in fewer visitations. Further, Macau GGR experienced slower than expected growth in Q3 largely due to typhoons and a slowing Chinese economy – resulting in soft VIP visitations. Consequently, we expect the company to report subpar Q3 results. However, we expect the holiday season in Q4 to drive LVS’s full year results. We expect Macau to be the driving force for LVS in 2018, since the gross gaming revenues (GGR) in the region grew consistently for the 26th straight month in September 2018. In addition, the various new infrastructure developments in Macau should boost the mass market business for the company.  Further, the company expects its diversified offerings in the Cotai strip to continue to provide solid growth. Given the improved outlook of the casino market in Macau, we expect another strong year for LVS in Macau driven by rising outbound travel, strong spending growth, and its strong presence in the region.

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