Las Vegas Sands

Las Vegas Sands at Cusp of Industry Revival

Las Vegas Sands Corp. (LVS) reports Q1 2021 earnings after Wednesday’s closing bell, offering a glimpse into the gaming industry’s ongoing recovery from the COVID-19 pandemic. Analysts are looking for the old school operator to lose $0.22 per-share on $1.37 billion in revenue, worse than the $0.02 loss reported in the same quarter last year. The stock ran in place after missing Q4 2020 top and bottom line estimates in January and is now trading close to a 14-month high.

Leaving Las Vegas

The Nevada Gaming Board reported that statewide ‘gaming win’ fell 25.9% year-over-year in February, with a 41.5% loss on the Las Vegas Strip. The March report at the end of this month should offer greater transparency into current conditions because it should compare favorably to March 2020, when the industry came to a grinding halt. Even so, challenges remain, with Nevada casinos allowing just 50% of capacity until final restrictions are lifted in June.

This should be Las Vegas Sands’ last full quarter with Nevada exposure, despite the company’s name, because it sold The Venetian and Sands Expo and Convention Center in March to focus on Asian operations. Macao is now waking up from the dead at a rapid pace, with the local Gaming Inspection and Coordination Bureau reporting that March generated the highest monthly revenue since January 2020. Even so, first quarter receipts were still down 22.5% year-over-year.

Wall Street and Technical Outlook

The property sale has provoked a mixed reaction on Wall Street, with consensus dropping to an ‘Overweight’ rating based upon 8 ‘Buy’, 1 ‘Overweight’, and 7 ‘Hold’ recommendations. Price targets currently range from a low of $53.50 to a Street-high $86.50 while the stock opened Wednesday’s session $10 below the median $69.50 target. This weak placement suggests that Main Street has reservations about the transaction as well.

Las Vegas Sands topped out in the 80s in 2014 and entered a decline that hit a 10-year low in the 30s in March 2020. The stock recouped about 80% of the pandemic decline into March 2021 but hasn’t ended the string of lower highs in place for the last three years, indicating the downtrend is fully intact. However, accumulation readings are telling a more bullish tale, lifting to the highest highs since 2011.  Given the conflict, mixed action into the third quarter looks the path of least resistance.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication.