Las Vegas Sands Stock Upgraded as Macau Recovery Shows Promise
Las Vegas Sands (NYSE: LVS) shares rallied after receiving an upgrade from Jefferies analyst David Katz, who raised the rating to "buy" from "hold" with a new price target of $69, up from $60. This represents a potential 38% upside from current levels.
The upgrade stems from anticipated improvements in the Chinese economy and Macau's gaming market. Katz expects Macau's gross gaming revenue (GGR) to reach pre-pandemic levels by 2026, after achieving 80% recovery in 2024. Last year, Macau concessionaires generated $28.3 billion in GGR, marking a 24% year-over-year increase.
Key factors supporting the upgrade include:
- Completion of Londoner Macau upgrades in H1 2025
- Potential Chinese monetary stimulus boosting consumer spending
- Strong positioning in mass and premium mass market segments
- Valuation metrics: 20x earnings, 12.5x price-to-free cash flow, and 11x EV/EBITDA
Additionally, Jefferies upgraded Boyd Gaming (NYSE: BYD) to "buy" with a $92 price target, citing the upcoming Norfolk temporary casino opening and undervalued 5% stake in FanDuel. Boyd Gaming shares increased 1.52% following the announcement.
Las Vegas Sands' modest 4% gain in 2024 lagged behind the S&P 500's performance, despite Macau's gaming sector recovery. The stock responded positively to the upgrade with a 1.04% increase on below-average trading volume.
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