Here's That Las Vegas Sands Upgrade Everyone Is Talking About

Photo: DieselDemon via Flickr

This morning KeyBanc Capital raised its rating on Las Vegas Sands to buy from hold with a price target of $57.The analysts made the upgrade based on

  • Its 4Q10 EPS of $0.42 beat KeyBanc’s estimated $0.37 EPS and the consensus of $0.39.
  • Property cash flow for LVS is $739 million, up 141% from the fourth quarter of 2009.
  • Upside was a result of controlled operating expenses and a low tax rate
  • Margins in Singapore and Macau were also much better than anticipated
  • Company will be able to pay for more projects in Macau and expand into the Far East, Europe and the U.S using its robust cash flow
  • LVS growth opportunities outweigh Chinese regulatory issues and competition
  • Property margins were 239 bps above the third quarter and 1,209 bps above a year ago
  • ┬áThe U.S. gaming market is continuing to get stronger. Las Vegas was boosted this year by the convention business.
  • KeyBanc analysts wrote “Going forward we see a company that has the cash flow to pay for growth projects in Macau, opportunities in the Far East, Europe and the U.S. In addition, LVS will be able to pay down a considerable chunk of debt and redeem its preferred issue with its current cash hoard.”
  • LVS “cracked the nut on the Integrated Resort model” according to KeyBanc

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