Investing.com -- Jefferies said it remains highly selective on land-based gaming stocks, urging investors to focus on companies with strong execution and visible growth as most markets face headwinds heading into the second quarter of 2026.

Analyst David Katz downgraded Las Vegas Sands to Hold from Buy and trimmed the price target to $61 from $72, citing concerns that the casino operator’s strategic push into the premium mass segment in Macau will weigh on margins over the medium term.

He estimates a customer reinvestment strategy comparable to the fourth quarter of 2025 would result in an approximately 570 basis point reduction in Macau adjusted EBITDA margin by 2027 versus 2023 levels, the largest such decline among peers. The bank’s FY26 and FY27 EBITDA estimates for Sands are 2.9% and 4.9% below Wall Street consensus, respectively.

"With LVS’s increased push into premium mass, we see risk that Adj. EBITDA growth underperforms expectations, driven by an elevated reinvestment rate," Katz wrote.

In Macau more broadly, Katz sees the premium mass segment as the only meaningful growth avenue following the collapse of the junket VIP model, but notes that competition for those customers is intensifying across operators.

The analyst favors Wynn Resorts, arguing the company’s premium-focused operating model positions it to outperform the broader market.

On the Las Vegas Strip, management teams have signaled that group and convention bookings have largely held up, while leisure demand remains soft. "The more economically sensitive portion of gaming demand is likely to face continued near-term headwinds as consumers contend with elevated airfares," Katz wrote.

He maintained a cautious view on the Strip and flagged weakness spilling into locals markets, forecasting Nevada EBITDAR at Boyd Gaming to decline 4.7% year-over-year.

On the regional side, the analyst described a new wave of gaming-related legislation as "more noise than measurable impact," with iGaming advancing in Maine and an open casino license bid in Indiana leaving the broader competitive landscape largely unchanged.