Las Vegas Sands (NYSE:LVS) is trading lower today — a day after delivering first-quarter results that included positive earnings before interest, taxes, depreciation and amortization (EBITDA) at its Marina Bay Sands integrated resort in Singapore.
The company reported a loss of 41 cents for the first three months of 2022 on revenue of $943 million. Analysts expected a per share loss of 24 cents on sales of $1.130 billion. Ongoing weakness in Macau, where Sands operates five gaming venues, remains fresh on analysts’ minds as at least five members of the sell-side community trimmed price targets on LVS stock.
The current concessions have been extended to yearend and LVS remains optimistic that the re-tender process should be concluded by then,” said CBRE analyst John DeCree in a note to clients. “The successful completion of the concession rebids will remove a long-standing overhang for the shares, but we still need to see signs of a sustainable reopening and fundamental recovery in GGR to get more constructive on Macau.”
UBS analyst Robin Farley is among the analyst clipping price projections on Sands, but she notes investors shouldn’t ignore the fact the company could generate $1 billion or EBITDA in Singapore over the next year.
Thailand Talk, Capital Return Update
The LVS roster currently consists of the five Macau properties and Marina Bay Sands, making any talk of expansion compelling.
Along those lines, analysts and investors are undoubtedly interested in rumors tying Sands to a yet-to-be-confirmed integrated resort effort in Thailand — likely Bangkok — but CEO Rob Goldstein didn’t shine any light on that topic on a conference call with analysts.
“I think it’s premature,” he said in response to an analyst question. “We’re looking at a lot of different things in Asia, and that’s certainly a list of things, but I think it’s premature to get ahead of ourselves there.”
With its stock down 43.57% over the past year and more gaming companies announcing share buyback plans, LVS is getting questions regarding its own shareholder reward plans. It appears the operator prefers restoring its dividend, which was suspended two years ago due to the coronavirus pandemic, to repurchasing its shares.
“It’s (the dividend) something that we want to look at in terms of really long-term operational cash flow growth, and then we’ll size it accordingly and look to that to recur before we actually start the dividend again,” said CFO Patrick Dumont in response to an analyst question.
He added the focus is investing in Macau and Singapore, looking resuming the dividend when cash flow rebounds and evaluating share buybacks “where the opportunities arise.”
As noted above, the LVS portfolio consists solely of Asia properties for the time being, but the company is mulling some US markets –namely Florida, New York and Texas.
The company recently scrapped a 2022 ballot initiative in Florida, though Goldstein acknowledges Sands isn’t abandoning the state.
“We failed in Florida recently, but we’re not done with Florida. We’re still looking at that. And there are places we can go and invest the kind of money on investment, the kind of returns we want, we’re not going to be buying small businesses,” he said on the call. “So I think at this point, as you talk to you today, it would have to be Texas, New York and perhaps Florida.”
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