American casino and resort operator Las Vegas Sands (LVS) missed analysts’ estimates for the third quarter of Fiscal 2024, citing weak performance in Macao. Adjusted earnings per share (EPS) fell 20% year-over-year to $0.44, missing the consensus of $0.53. Similarly, net revenue declined 4.3% year-over-year to $2.68 billion and also came in lower than analysts’ expectations of $2.79 billion.
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Reasons for LVS’ Poor Performance
LVS blamed its poor performance on the “lower than expected hold” in Singapore and the ongoing development work at the Londoner in Macao. The post-COVID recovery in Macao has been particularly slow and visitations are yet to reach the pre-pandemic levels.
Compared to Q3 FY23, net revenue in Marina Bay Sands, Singapore, fell 9.5% to $919 million while in Macao, net revenues declined 1.1% to $1.77 billion.
LVS shares dipped 5.2% in after-hours trading initially on the results, but closed 1.9% higher on Wednesday, as the management made some shareholder value enhancements.
Share Buybacks and Raised Dividends to Woo Shareholders
LVS’ board of directors approved a $2 billion stock buyback program for the future. The company repurchased $450 million worth of LVS shares in the quarter.
Moreover, the board announced a $0.20 per share increase in common stock dividend for the calendar year 2025. This will increase the quarterly cash dividends to $0.25 per share and the annual dividend to $1.00 per share.
Additionally, the company entered into a deal to buy SCL (Sands China Ltd.) common stock in October owing to which LVS will receive a further 23.4 million shares of SCL, raising its equity stake to 71.31%.
Hedge Funds are Highly Optimistic on LVS
According to TipRanks’ Hedge Funds Trading Activity tool, hedge funds seem highly optimistic about the company’s recovery and future prospects. LVS has a Very Positive Hedge Fund Confidence Signal since several hedge funds increased their LVS holdings by 6.7 million shares in the last quarter.
Is LVS a Buy Right Now?
Wall Street remains divided on Las Vegas Sands stock owing to the ongoing headwinds. On TipRanks, LVS stock has a Moderate Buy consensus rating based on ten Buys versus five Hold ratings. The average Las Vegas Sands price target of $54.92 implies 7.6% upside potential from current levels. Year-to-date, LVS stock has gained 5.1%.
