Analysts at Morgan Stanley have turned bullish on Las Vegas Sands (LVS) over a positive Macau outlook.

The firm hiked its rating on Las Vegas Sands' stock to "Overweight" from "Equal-Weight" and assigned it a $72 price target, after studying the market growth in Macau, considered the "Las Vegas of Asia."

Shares of Las Vegas Sands were climbing over 1% in midday trading on Tuesday. 

"We are more bullish on Macau after doing a deep dive into the drivers of market growth for the next 5 years. We expect LVS will outperform expectations despite losing share. This, coupled with low leverage and attractive dividend yield, drives our upgrade," Morgan Stanley noted.

The firm projects Macau gaming revenue to increase at a 10% compound annual growth rate through 2022 due to China's improving infrastructure, its transition to a high-income economy, and continued development of the Greater Bay Area (surrounding Macau, HK, and Guangzhou).

Shares of Las Vegas Sands have jumped over 24% year-to-date.

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