What To Expect From Las Vegas Sands In Q4

Las Vegas Sands (NASDAQ: LVS) has had a decent year so far, though it missed earnings estimates on two occasions. With three quarters reported, the company’s revenue growth year to date has been just under 10%, and we expect the revenue trend to continue when the company reports its fourth quarter earnings on January 23. We believe this growth will be primarily driven by robust performance in Macau and Las Vegas, as a result of a solid holiday season. Although the ongoing expansions of multiple Macau casinos are likely to dampen its bottom line in the near term, we expect the remodeling, suite additions, and the renovation of VIP gaming areas at multiple properties should drive significant potential in the long term. Below we take a look at what to expect from LVS in Q4.

Our price estimate for Las Vegas Sand’s stock stands at $81, which is now significantly higher than the market price. We have also created an interactive dashboard which outlines what to expect from Las Vegas Sand’s full-year results. You can modify the key value drivers to see how they impact the company’s revenues and bottom line. Below we discuss some of the key factors that are likely to impact LVS’s earnings.

Macau operations, which generate nearly 63% of LVS’s overall revenues, have been the key driver of growth for the company so far, and we expect this trend to continue into Q4 – driven by a robust holiday season. Despite a slowdown in gross gaming revenues (GGR) – due to hurricanes, a weak VIP market, and slowing Chinese economy sentiment – the full year GGR remained strong  (grew by nearly 14% y-o-y). We expect Macau to drive LVS’s 2018 results, as the GGR in the region grew consistently for the 29th straight month of growth in December 2018. Additionally, the multiple new infrastructure developments in Macau should boost the mass market business for the company. In addition, the company expects its diversified offerings in the Cotai strip to continue to provide solid growth. As a result of the improved outlook of the casino market in Macau, we expect another strong year for LVS in Macau driven by growing outbound travel, spending growth, and its strong presence in the region. However, the ongoing trade war and economic slowdown in China should slightly dampen the 2019 outlook.