NEW YORK (TheStreet) -- Shares of Las Vegas Sands Corp. (LVS) closed down 2.28% to $58.31 after Credit Suisse downgraded the Las Vegas Sands' subsidiary Sands China today to "neutral" with a price target of HK$53.8.
The developer of resorts and destination properties has lost a big hand in the Macau gaming sector, analysts said.
"Gaming names have rallied 20% from their bottom on the hope that the worst is behind," analysts said, adding, "However, the absence of a significant recovery in revenue trend and mass market potentially shows the first ever year-over year decline since 2009, and may trigger another round of earnings downgrades and concerns about new supply."
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 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 growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- LAS VEGAS SANDS CORP has improved earnings per share by 9.2% 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 ($3.55 versus $2.79).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Hotels, Restaurants & Leisure industry average. The net income increased by 7.2% when compared to the same quarter one year prior, going from $626.74 million to $671.71 million.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.8%. Since the same quarter one year prior, revenues slightly dropped by 1.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- LVS has underperformed the S&P 500 Index, declining 13.79% from its price level of one year ago. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
- You can view the full analysis from the report here: LVS Ratings Report