JPMorgan has a positive outlook for Las Vegas Sands, recently upgrading the casino operator’s shares from neutral to overweight. Analyst Daniel Politzer has also increased the price target by $4, bringing it to $60 per share. This adjustment suggests a potential upside of 22% from the stock’s closing price on Wednesday. A significant factor in this optimistic forecast is the anticipated growth in the Singapore market, particularly the Marina Bay Sands, which Politzer identifies as a key asset for Las Vegas Sands.
“Our upgrade is based solely on Singapore upside, with LVS’s current valuation implying this asset is underpriced,” Politzer stated. He further emphasized that the high-quality nature of Marina Bay Sands, coupled with the company’s proven ability to attract high-end gaming customers from Southeast Asia, supports this positive outlook. Additionally, the growing popularity of prop bets could enhance table hold and drive earnings growth.
As Las Vegas Sands prepares for its upcoming earnings release next week, Politzer believes that current estimates may be conservative, indicating potential upside for the company’s third-quarter projections in Singapore. Currently, Las Vegas Sands is trading 15% below its recent highs, but the market sentiment appears to be shifting positively.
“Simplistically, we think Singapore is worth $37 per LVS share, which is $10 more than its current implied value of $27 per share,” the analyst explained. “The math is straightforward: LVS at $48 per share, and its 73% stake in 1928 HK is valued at approximately $21 per share, implying Singapore’s worth at $27 per share.”
Following this news, Las Vegas Sands shares saw an increase of more than 2% in premarket trading. However, it is important to note that year-to-date, the shares have experienced a decline of over 4%. Despite this, the majority of analysts remain bullish on Las Vegas Sands. According to LSEG data, 13 out of the 19 analysts covering the stock have rated it as a buy or strong buy.
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Investors are underpricing Las Vegas Sands’ Singapore assets, says JPMorgan
