Asia Casino

Asia Casino

January 11, 2022

Las Vegas Sands Cut to Underperform Amid Macau Headwinds. Shares Lose About 5%.

Las Vegas Sands has been downgraded to Underperform from Neutral by BofA Securities due to concerns about its big exposure to overseas markets, including Macau.

Shares of Las Vegas Sands (ticker: LVS) were at around $36 on Monday morning, down about 5% on the session amid a broader selloff for stocks.

In a note Monday about casino stocks, BofA Securities observed that for Las Vegas Sands it expects “a continued tough path for Macau amid the 3 C’s risks: COVID, concession and crackdown.”

In 2019, before the pandemic hit, Macau accounted for roughly two-thirds of the Las Vegas-based company’s revenue.

Nearly a year ago, the company doubled down on its overseas operations by announcing that it would sell its Las Vegas real estate, including the Venetian, to VICI Properties (ticker: VICI), a real estate investment trust, for $6.25 billion.

BofA Securities lowered its price target on the stock to $40 from $46.

“Near-term we see continued risk from COVID-related disruption and do not see a simple or easy exit from the implications for Macau of China’s zero tolerance COVID policy,” the analysts wrote. “In addition, we think key source markets around Southeast Asia could weigh on the pace of recovery in Singapore.”