Las Vegas Sands Puts A Lid On Potential Japanese Development

In a surprise announcement, the famous casino and resort company Las Vegas Sands (LVS) has revealed that it is no longer pursuing the opportunity to develop a resort in Japan.

“While my positive feelings for Japan are undiminished, and I believe the country would benefit from the business and leisure tourism generated by an Integrated Resort, the framework around the development of an IR has made our goals there unreachable” explained the company’s billionaire CEO, Sheldon Adelson.

He continued: “We are grateful for all of the friendships we have formed and the strong relationships we have in Japan, but it is time for our company to focus our energy on other opportunities.”

According to Bloomberg, one of the biggest problems for LVS was that the concession would only last 10 years vs 20 and 30 years in Macau and Singapore, respectively.

As the 86-year old CEO points out, Las Vegas Sands is currently executing significant investment programs in both Macao and Singapore to “create meaningful new growth from our existing portfolio.”

Encouragingly, the stock has received a string of recent analyst upgrades. In April, JP Morgan analyst Joseph Greff upgraded LVS from hold to buy with a $52 price target (13% upside potential).

“Overall, we view LVS as a way to play what should be improving [gaming group] trends in Macau, a gaming/travel dependent market that experienced the COVID-19 downturn first and should experience a bounce/recovery earlier, at least in relation to potential recoveries in U.S. regional gaming, Las Vegas Strip, and U.S. business travel lodging markets,” Greff told investors.

Indeed the stock shows a bullish Strong Buy analyst consensus, with 10 recent buy ratings vs just 2 hold ratings. Meanwhile the average analyst price target stands at $57, indicating upside potential of 24%. Shares have sunk 33% year-to-date. (See Las Vegas Sands stock analysis on TipRanks).

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