Is LVS’ Macau Volatility Highlighting Deeper Risks in Its China-Focused Growth Strategy?

• During the past week, Las Vegas Sands and other casino operators with significant Macau exposure were affected by weaker-than-expected travel data from China’s Golden Week holiday and concerns over a tropical cyclone potentially disrupting business in the region.
• This development highlighted ongoing volatility in the Macau gaming sector, reminding investors of the sensitivity of operator performance to shifts in Chinese tourism trends and regional weather events.
• To understand how Macau’s softer Golden Week travel data might affect the company’s investment narrative, we’ll consider the potential for near-term earnings pressure.

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Las Vegas Sands Investment Narrative Recap

To be a shareholder in Las Vegas Sands right now, you have to believe in a recovery and ongoing growth in Macao and Singapore, especially as new properties ramp up and tourism rebounds. The soft Golden Week travel data and cyclone concerns highlight volatility in Macao, which may weigh on near-term performance but are not expected to materially alter the long-term catalyst of ramping revenues from The Londoner and stable growth at Marina Bay Sands. The key risk that remains is sensitivity to rapid shifts in Chinese tourism patterns, which can immediately impact both revenue and investor sentiment.

Among recent announcements, the continued expansion and strong performance at Marina Bay Sands in Singapore stands out, aligning closely with current catalysts. Record EBITDA at this property underscores the company’s ability to generate value outside of Macao and offers some balance to the risks posed by fluctuations in Chinese tourism, providing another growth lever as the group works to diversify and strengthen earnings streams.

But on the flip side, if Chinese travel trends remain unpredictable, investors should not lose sight of…

Read the full narrative on Las Vegas Sands (it’s free!)

Las Vegas Sands’ outlook suggests $14.1 billion in revenue and $2.5 billion in earnings by 2028. Achieving this would mean 6.8% annual revenue growth and an earnings increase of $1.1 billion from the current $1.4 billion.

Uncover how Las Vegas Sands’ forecasts yield a $60.51 fair value, a 19% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members provided 8 fair value estimates for Las Vegas Sands, ranging widely from US$2 to US$77.89 per share. With tourism in Macao proving unpredictable, consider how these sharply differing perspectives reflect uncertainty about what will drive future growth.

Explore 8 other fair value estimates on Las Vegas Sands – why the stock might be worth less than half the current price!

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This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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