Las Vegas Sands, a well-known hospitality and gaming company, announced in February 2022 that it was launching a major overhaul of Marina Bay Sands. This week, the company initiated the second phase of the project, involving a $750 million reinvestment. Around the same time, Las Vegas Sands’ share price target saw an increase.
Carlo Santarelli, an analyst for Deutsche Bank, raised his price share target for the company to $66 per share, up from $65. He also maintained a “buy” rating for the company, citing optimism about Sands’ continued growth in Macau and the US.
Santarelli explained, “We remain firm in our view of the favorable risk-reward in LVS shares at current levels and we believe continued strength and sequential growth in Macau, as well as the differentiation of the Macau gaming environment, relative to US gaming markets, will drive share outperformance in 2024.”
Despite the increase in the stock price target, Santarelli reevaluated Las Vegas Sands’ projections for the fourth quarter of 2023 in Macau. He predicted that the company’s cash for the quarter would decrease to $611 million, compared to the initial estimate of $678 million. This reevaluation was necessary due to the weak market share for Sands in Macau during November. Santarelli explained that the company usually holds approximately 25.5% share within the gambling sector in Macau. He attributed the reduced cash figure to increased commissions for junket operators who helped with VIP customers, as well as higher expenses for promotional spending.
Las Vegas Sands’ bold move to revamp Marina Bay Sands and the optimistic outlook from analysts like Santarelli indicate that the company is poised for continued growth and success in the near future.