Will Upbeat Mass Market Gaming Activity Drive A Revenue Beat For Las Vegas Sands?

Las Vegas Sands (NYSE: LVS) will release its full-year 2019 results on Wednesday, January 29. Trefis details expectations from the casino company in an interactive dashboard, parts of which we highlight below. We believe that Las Vegas Sands will report its fiscal 2019 revenues ahead of market expectations from the growing mass gaming market in Macau. We expect Las Vegas Sands to report total revenues of $13.7 billion (vs. consensus estimate of $13.6 billion) and earnings of around $3.10 (vs. consensus estimate of $3.14). We also estimate Las Vegas Sands’ valuation to be about $70 per share, which is above the current market price, primarily due to the company’s 45% share of Macau’s mass gaming market.

Trefis shines the spotlight on key assumptions and data for Las Vegas Sands, and our hypothesis lays out one possible set of expectations. You can chime in with your expectations for Las Vegas Sands’ FY19 earnings in our interactive dashboard.

[1] Las Vegas Sands’ Revenues expected to beat street estimates

• The company generates 70% of its net revenues from the casino business.
• Macau alone contributes around 70% of the company’s total casino revenues – implying that Macau casino revenues make up almost half of the company’s total revenues
• In the last three quarters, Sands reported casino revenues of $1.9 billion, $1.7 billion, and $1.7 billion from Macau – representing year-on-year growth of 10%, 2%, and 0%, respectively.
• However, the company’s Room revenues have observed low-single-digit growth during the year.
• Considering quarterly trends and Macau Gaming Market data by the city’s regulator (DICJ), we estimate Sands’ net revenues to have shrunk by 0.3% to $13.7 billion for the full year 2019.

[2] EPS expected to increase by 1% from $3.07 in 2018 to $3.10 in 2019, driven by stable margins

• During the first three quarters of 2019, the company has been able to achieve a stable operating margin despite a contraction in its top line.
• Thus, we expect the company’s EPS to grow by just 1% to $3.10 for the full year 2019, driven by flat revenues and operating margin.
• Our valuation for Las Vegas Sands’ stock stands at $70 per share, using a forward P/E multiple of 22.5 and an EPS of $3.10

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