Las Vegas Sands Corp. (NYSE:LVS) Analysts Are Cutting Their Estimates: Here's What You Need To Know
Investors in Las Vegas Sands Corp. (NYSE:LVS) had a good week, as its shares rose 9.8% to close at US$49.81 following the release of its quarterly results. It wasn’t the greatest result, with ongoing losses and revenues of US$586m falling short of analyst predictions. The losses were a relative bright spot though, with a per-share statutory loss of US$0.74 being moderately smaller than the analysts forecast. Earnings are an important time for investors, as they can track a company’s performance, look at what the analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Las Vegas Sands
Taking into account the latest results, the consensus forecast from Las Vegas Sands’ 17 analysts is for revenues of US$10.5b in 2021, which would reflect a substantial 76% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Las Vegas Sands forecast to report a statutory profit of US$1.49 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$11.3b and earnings per share (EPS) of US$1.99 in 2021. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.
The analysts made no major changes to their price target of US$58.14, suggesting the downgrades are not expected to have a long-term impact on Las Vegas Sands’ valuation. There’s another way to think about price targets though, and that’s to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Las Vegas Sands analyst has a price target of US$73.00 per share, while the most pessimistic values it at US$47.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Las Vegas Sands shareholders.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Las Vegas Sands is forecast to grow faster in the future than it has in the past, with revenues expected to grow 76%. If achieved, this would be a much better result than the 1.0% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 21% per year. So it looks like Las Vegas Sands is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at US$58.14, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year’s earnings. At Simply Wall St, we have a full range of analyst estimates for Las Vegas Sands going out to 2024, and you can see them free on our platform here..
Don’t forget that there may still be risks. For instance, we’ve identified 1 warning sign for Las Vegas Sands that you should be aware of.
This article by Simply Wall St is general in nature. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected].
