Las Vegas Sands (LVS - Get Report) is likely the front runner to acquire Japan's first casino permit, Morningstar analyst Chelsea Tam noted.

"In our view, narrow-moat Las Vegas Sands Corp is best positioned to win a gaming concession in the middle of 2019, due to its track record of managing global resorts with a strong balance sheet," Tam wrote.

Japan authorized the development of an integrated resort last year. Consequently, several casino operators have started competing for real estate in one of the most coveted Asian gaming markets.

"Our $57 fair value estimate for Sands might increase by around a high-single-digit percentage, as we evaluate the impact from a Japanese gaming license over the coming weeks, which would leave shares slightly undervalued at current share prices," Tam contended.

Licenses could be awarded in 2019, with the first integrated resorts opening their doors around 2024.

Shares of Las Vegas Sands were higher by over 2.6% during the final hour of trading on Tuesday. 

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