NEW YORK (TheStreet) -- Shares of Las Vegas Sands (LVS) - Get Report are rising higher by 2.26% to $43.90 at the start of trading on Wednesday morning, after the resort and casino operator received an upgrade to its corporate family rating and probability of default rating at Moody's Investor Service last night.
The firm reduces Las Vegas Sands' corporate family rating to Ba1 from Ba2. The company's probability of default rating went to Ba1-PD from Ba2-PD.
"The upgrade considers Moody's view that LVSC's assets in Singapore and the US will provide the company with the ability to maintain its very strong credit and liquidity profile despite the expectation of continued weakness and increased competition in Macau, a considerable amount of planned capital expenditures, and a large amount of regular cash dividend payments," Moody's senior VP Keith Foley said.
Casino operators with business in China's Macau gambling hub have been dealing with more than a year of consecutive monthly declines in revenue, as China's government cracks down on corruption.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate LAS VEGAS SANDS CORP as a Buy with a ratings score of B-. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 48.19% is the gross profit margin for LAS VEGAS SANDS CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.94% is above that of the industry average.
- LVS, with its decline in revenue, underperformed when compared the industry average of 1.3%. Since the same quarter one year prior, revenues fell by 18.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- LAS VEGAS SANDS CORP's earnings per share declined by 21.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, LAS VEGAS SANDS CORP increased its bottom line by earning $3.51 versus $2.79 in the prior year. For the next year, the market is expecting a contraction of 26.6% in earnings ($2.58 versus $3.51).
- The debt-to-equity ratio of 1.32 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, LVS's quick ratio is somewhat strong at 1.34, demonstrating the ability to handle short-term liquidity needs.
- You can view the full analysis from the report here: LVS