Las Vegas Sands Corp. (NYSE: LVS) recently posted second-quarter results that fell short of Wall Street expectations, sending shares down 5.5% over the past week. Still, analysts see the company’s long-term outlook as compelling, driven by its dominant presence in Macau and Singapore.
These two markets contributed 90% of LVS’s EBITDA last year, with Marina Bay Sands in Singapore and five casinos on Macau’s Cotai Strip anchoring its growth. Morningstar analyst Dan Wasiolek noted the firm’s strength in mass-market and non-gaming segments, calling it a key advantage for long-term expansion.
In Q2, LVS reported $2.14 billion in China revenue and $765 million in EBITDA, missing forecasts slightly. Yet the company is pressing forward with $2.2 billion in new Macau investments aimed at boosting non-gaming revenue, a strategy seen as favorable for its upcoming license renewal.
Sands is also targeting Japan, where Morningstar expects it to secure one of only two integrated resort licenses, potentially launching a new property by 2025. That development could generate a “high teens” share of EBITDA and deliver a 20% return on invested capital.
Morningstar forecasts LVS’s ROIC will climb from 25% in 2018 to 44% in 2028, with operating margins improving to 35%. Reflecting this optimism, Wasiolek raised his fair value estimate for LVS shares to $77, well above current levels around $61.60.
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