Las Vegas Sands (LVS) Q1 Preview: Litigation... What Litigation? Macau is on Fire, Baby!

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Traders are selling shares of Las Vegas Sands Corp. (NYSE: LVS) ahead of first-quarter earnings expected out after the market close Tuesday. The stock last traded at $46.47, down 2.2 percent from Monday's closing price.

The casino operator is expected to report EPS of $0.44 on revs of $2.14 billion. Last quarter, Las Vegas Sands posted EPS of $0.42 on revenue of $2.02 billion. For the first quarter of 2010, the company saw earnings of $0.07 per share on sales of $1.33 billion.

Shares fell 7.4 percent through the quarter and are up 12.6 percent since.

Las Vegas Sands shares currently trade at a P/E of 20.8x FY12 EPS estimates, compared with 29.1x at Wynn Resorts (Nasdaq: WYNN) and 49.6x for Boyd Gaming Corp. ( BYD ).

Data from Bloomberg has 20 analysts with a Buy on Las Vegas Sands, 7 with a Hold, and two suggesting to Sell. The analyst price target average is $54, with a high of $70 and low of $44. Shares have traded in a range of $55.47 - $18.08 over the last 52-weeks.

Analyst Summary
For the most part, analysts were equally as concerned with Macau revenue as they were unconcerned with pending litigation. Macau revs mostly accelerated in the quarter: 33.2 percent to 18.57 billion Macanese patacas in January, 47.7 percent to 19.86 billion Macanese patacas in February, and 48.0 percent to 20.09 billion Macanese patacas in March.

  • Wells Fargo sees EPS of $0.49, but expects a little upside from results in Macau. "While we anticipate investors will largely focus on what we expect to be a sequential improvement in VIP rolling chip volume at Marina Bay Sands, we believe LVS is poised to post another solid quarter of year over year property level EBITDA growth at each of its properties in Macau."

    Turning to the Las Vegas Strip, the firm said, "Given the continued sluggishness of the Las Vegas Strip from a big picture perspective, we believe the primary focus of the Q111 Las Vegas results for LVS should be margins. Recall, LVS shifted its view on comps and other promotional activities in the Q410, effectively reigning in a vast majority of its comp related programs. We would expect to see more of this mindset shift flow through in the Q111, though we note that occupancy and domestic table and slot play could see some market share contraction."

  • KeyBanc is looking for EPS of $0.46, which was recently increased from a previous estimate of $0.44. KeyBanc expects Macau revs of $1.24 billion or better. "We continue to believe that the recent weakness in shares of LVS in the aftermath of the announced FCPA investigation has created a compelling opportunity. We feel confident that the claims made by a jilted ex-employee and related investigations by various agencies will prove to be less than game-changing events. We expect this situation to be resolved over the intermediate term (a couple of years) with worst case outcome a sizable fine or settlement of less than $1 per share, that will have little impact on shares of this quality growth name."

  • Citadel Securities recently increased its first-quarter EPS estimate to $0.43 on sales of $2.192 billion. "For the Venetian Macao, Sands Macao and Plaza Macao combined, we are now modeling for 21.5% YoY growth in GGR for 1Q11, up from 19.6% previously. Importantly, we believe that our new forecast could still prove conservative relative to how fast the overall market has been growing. However, we would highlight that we believe it is unlikely that LVS's relatively mature Macau assets would outperform the overall market's growth rate, at least not until the company's new Sites 5&6 properties open on Cotai at the end of the year - pulling more traffic closer to its Venetian and Plaza properties. For the full year 2011, we believe LVS's existing properties in Macau should be able to grow net revenue in excess of 18% and property EBITDAR in excess of 17% - and this is before Sites 5&6 open."

  • Barclays recently issued a preview for gaming stocks, stating that the firm sees Las Vegas Sands beating expectations on strong Macau results.
Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of the release.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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