NEW YORK (TheStreet) -- Shares of Las Vegas Sands Corp. (LVS) are down 2.64% to $ 60.57 in late morning trading following a report from Morgan Stanley (MS) analysts that said the decline in China's top gambling region, Macau, has not yet found a bottom because the consensus estimate is still too high.
Morgan Stanley added they are particularly worried about the tight labor market conditions in Macau and its impact on the casinos' profitability.
Also, the Macau Business Daily reported that casinos there would likely see a 5% drop in revenue from June to August.
Shares of other casino companies are also lower including Galaxy Entertainment Group (GXYEY) down 3.22% to $65.13, Wynn Resorts (WYNN) down 2.38% to $176.42, Melco Crown Entertainment (MPEL) , down 4.87% to $25.76 and MGM Resorts International (MGM) down 3.58% to $22.38 today.
Separately, TheStreet Ratings team rates LAS VEGAS SANDS CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate LAS VEGAS SANDS CORP (LVS) a BUY. This is driven by multiple strengths, 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 revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 5.7%. Since the same quarter one year prior, revenues rose by 11.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- LAS VEGAS SANDS CORP has improved earnings per share by 29.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, LAS VEGAS SANDS CORP increased its bottom line by earning $2.79 versus $1.85 in the prior year. This year, the market expects an improvement in earnings ($3.68 versus $2.79).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 26.7% when compared to the same quarter one year prior, rising from $529.75 million to $671.43 million.
- 46.40% 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 18.52% is above that of the industry average.
- Net operating cash flow has increased to $1,258.22 million or 10.49% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.19%.
- You can view the full analysis from the report here: LVS Ratings Report
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