Goldman Sachs Comments on Las Vegas Sands (LVS) Q2

Goldman Sachs maintained a Buy rating on Las Vegas Sands (NYSE: LVS). Analyst Steven Kent thinks its share buyback is a positive, although Macau missed expectations. Overall, he expects the stock will be pressured today.

"After the close, LVS reported 2Q results that missed forecasts. Adjusted property EBITDA of $1.31bn came in below GS/consensus at $1.36bn. The main driver of the miss was a shortfall in the Macau segment where property EBITDA of $801.3mn came in below our $866mn forecast. While we had expected Macau to be relatively soft given the quarter-to-date government reported numbers (and had lowered our estimates accordingly), the results were still below these. We were also disappointed we did not see as much operating leverage given the strong mass market volumes which tend to have better margins. However, LVS noted that a new bonus accrual program for non-management employees and low hold negatively impacted EBITDA by ~$49mn. Adjusted EPS of $0.85 was below GS/consensus of $0.86/$0.90. On the positive side, the company bought back $320mn worth of stock, which was above our forecast of $225mn," said Kent.

"Macau: The driver of the EBITDA and revenue shortfall in Macau versus our estimates was the hold rate. Across all four properties, VIP, mass and slot volumes were better than our forecasts; however, hold rates were universally lower. LVS noted there could be more volatility on the mass hold rate going forward given the shift to more premium mass tables," he added.

For an analyst ratings summary and ratings history on Las Vegas Sands click here. For more ratings news on Las Vegas Sands click here.

Shares of Las Vegas Sands closed at $73.80 yesterday.

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