Deutsche Bank thinks a $45 billion resort operator may be poised to outperform the broader gaming industry. The bank reiterated a buy rating on shares of Las Vegas Sands and raised its price target to $74 from $69. That equates to about 25% upside for the stock from Wednesday’s close near $59. Deutsche said the company’s growth in Macao and a faster than expected recovery drove the more positive outlook. “Given U.S. macro concerns, the growth trajectory in both Macao and Singapore, and the evolving margin profile upside in [Macao], we continue to believe LVS is well positioned to outperform within the gaming sector,” Deutsche Bank research analyst Carlo Santarelli wrote in a note Wednesday. LVS YTD mountain Shares of resort company Las Vegas Sands added to gains early Thursday after reporting quarterly results a day earlier. Las Vegas Sands reported first quarter results Wednesday that beat Wall Street estimates on both revenue and earnings. Sands earned 28 cents per share on an adjusted basis, against analysts’ estimate of 20 cents, representing about a 40% earnings day surprise, according to data from FactSet. And despite the company contending with nearly 4,000 rooms being out of service in Macao throughout the quarter, Sands was able to hang on to a 31.5% share in the mass market there, only a 310 basis point decline compared to the same quarter in 2019, pre-Covid. Deutsche also noted that even though Las Vegas Sands expects hotel labor to return to more normal levels, the company will now be able to make available a greater share of rooms to customers. “We continue to believe labor levels, the VIP gaming margin profile, and the gaming revenue mix, will add meaningfully to EBITDA and property margin,” Santarelli said. Las Vegas Sands was more than 5% higher in pre-market trading early Thursday. — CNBC’s Michael Bloom contributed to this report.
