The analysts might have been a bit too bullish on Las Vegas Sands Corp. (NYSE:LVS), given that the company fell short of expectations when it released its full-year results last week. The numbers were fairly weak, with sales of US$3.6b missing analyst predictions by 2.6%, and (statutory) losses of US$2.21 per share being slightly larger than what the analysts had expected. Earnings are an important time for investors, as they can track a company’s performance, look at what the analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Las Vegas Sands
Following the latest results, Las Vegas Sands’ 16 analysts are now forecasting revenues of US$9.02b in 2021. This would be a major 150% improvement in sales compared to the last 12 months. Las Vegas Sands is also expected to turn profitable, with statutory earnings of US$0.91 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$10.0b and earnings per share (EPS) of US$1.25 in 2021. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a pretty serious reduction to earnings per share numbers.
The analysts made no major changes to their price target of US$61.56, suggesting the downgrades are not expected to have a long-term impact on Las Vegas Sands’ valuation. There’s another way to think about price targets though, and that’s to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Las Vegas Sands analyst has a price target of US$84.00 per share, while the most pessimistic values it at US$47.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Las Vegas Sands’ past performance and to peers in the same industry. One thing stands out from these estimates, which is that Las Vegas Sands is forecast to grow faster in the future than it has in the past, with revenues expected to grow 150%. If achieved, this would be a much better result than the 4.8% annual decline over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 24% next year. So it looks like Las Vegas Sands is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Las Vegas Sands. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year’s earnings. We have forecasts for Las Vegas Sands going out to 2024, and you can see them free on our platform here.
That said, it’s still necessary to consider the ever-present spectre of investment risk. We’ve identified 1 warning sign with Las Vegas Sands , and understanding it should be part of your investment process.
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