Q4 Preview: Don't Take A Gamble, Get Las Vegas Sands (LVS) Ahead of Earnings

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Las Vegas Sands Corp. ( LVS ) is trading higher today, ahead of the company's fourth quarter 2010 earnings report, expected out after the market closes today. Shares are up1.5% in the afternoon session.

LVS is expected to report EPS of $0.39 on revs of $2.07 billion. Last quarter, the Las Vegas, NV-based casino and entertainment giant posted EPS of $0.34, ex-items, on revs of $1.91 billion, easily surpassing the Street consensus looking for EPS of $0.23 and revenues of $1.79 billion. Looking back at Q409, EPS for LVS was in-line with the consensus at $0.03 on revenues of $1.28, a slight beat.

Sands' shares gained 30.6% through the quarter, to $45.95 at the end of December. LVS is up 9.3% since then, and made a spectacular run through 2010, ending the year 176% better.

A simple valuation puts LVS with a forward P/E of 20.1x FY11 EPS estimates, compared to 44.1x for Wynn Resorts (Nasdaq: WYNN) and an astonishing 222.8x for Boyd Gaming ( BYD ), who is just getting back into positive territory. MGM International ( MGM ) is not expected to produce positive earnings in FY10 or FY11.

Data from Bloomberg has 17 analysts with a Buy on LVS, 9 with a hold, and one suggesting to Sell. The analyst price target average is $53.50, with a high of $70 and low of $44. Shares have traded in a range of $55.47 - $14.88 over the last 52-weeks.

Summary

  • Goldman Sachs sees stronger Q4 results for LVS based on accelerating results in Macau and Singapore, and to a lesser extent in Las Vegas. They're looking for EPS of $0.30. Q4 EBITDA is expected to be $676 million, compared to $264 million in Q409 and $590 million last quarter.

    Upside risk includes a faster-than-expected Las Vegas recovery, Macau acceleration, and Singapore success. Downside includes high expectations into the Singapore opening or changes to Macau visitation policies.

    Goldman currently has a Neutral rating on the shares with a price target of $44.

  • Hudson Securities is also expecting big things from Singapore and Macau. They expect Q410 EBITDA of $674 million, with 52% derived from Macau. Hudson is expecting $66 million in EBITDA from Las Vegas, amounting to 9% of the total. Singapore should account for 41% of EBITDA, or about $295.2 million.

    Hudson is also concerned over the recent departure of Marina Bay Sands CEO, which they believe will add a little instability to LVS's Asia operations. Other topics will be progression of Four Seasons apartment sales in Cotai, and strength in Singapore.

    Hudson has a Buy rating on the shares, with a price target of $56. They're comfortable holding the shares ahead of results.

  • On the Marina Bay CEO departure, J.P. Morgan sees the promotion of Rob Goldstein to President of Global Gaming Ops as a positive to Asia ops. They think that "part of Mr. Goldstein's new role is to build out its management bench in Asia (Singapore in particular) and has been recently active in this regard."

    JPM is positive on LVS into earnings, including solid results out of Marina Bay. They maintain their Overweight rating.
Investors will definitely looking for an update on Cotai, where LVS said in early December that the local government hasn't approved their application for a a land concession for Parcels 7 and 8. The company already sank $100 million into those projects. Conversely, a few weeks later, LVS said that the Macau government will soon approve the sale of the company's shares in its Four Seasons-branded apartment-hotel in Cotai, which some peg as a $1 billion deal for the company.

Las Vegas Sands Corp. is expected to release their Q410 earnings on Thursday, February 3, 2011, at approximately 4:00pm EST. Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results withi0 n seconds of their 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.



This article appears in: Investing , Stocks

Referenced Stocks: BYD , LVS , MGM , WYNN

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