Las Vegas Sands Corp (LVS), a leading global integrated resort operator, holds a prominent position in the casino industry, especially in Macao and Singapore. Recently, Morningstar has maintained a BUY rating for the stock, with a fair value estimate of $60 USD per share, offering substantial upside from its current market price of $47.21 USD (as of January 11, 2025). The company’s focus on its Macao and Singapore properties and a well-executed investment strategy has provided it with a narrow economic moat, driving positive long-term growth expectations.

Summary of Investment Considerations

Last Price: $47.21 USD
Fair Value Estimate: $60.00 USD
Market Capitalization: $35.64 billion USD
Economic Moat: Narrow
P/E Ratio: 32.21
Price/Fair Value: 0.82
Dividend Yield: 1.62%
Despite global uncertainties, particularly in China’s economy and regulatory concerns, Las Vegas Sands continues to benefit from its dominant market position in Macao and the duopoly in Singapore. The company's capital allocation strategy remains exemplary, and its focus on reinvesting in high-return assets reinforces its competitive position. Investors looking for exposure to the Asian gaming and hospitality sectors may find LVS an attractive proposition.

Business Strategy and Outlook

Las Vegas Sands’ strategy revolves around maintaining dominance in the Macao market, where it holds a leading position along the Cotai Strip. The company has also been expanding its operations in Singapore, enhancing its Marina Bay Sands resort with additional investments.

In Macao, LVS has committed over $3 billion USD to upgrade its existing properties, with plans for further $1.2 billion USD investments in 2024. This aggressive strategy includes the renovation of rooms, casinos, and convention spaces, further strengthening the company’s brand and market share. Macao remains a key driver of LVS's revenues, contributing over 54% of EBITDA in 2023.

Meanwhile, Singapore represents a duopoly in the regional market, with LVS benefitting from a high occupancy rate and strong demand for its Marina Bay Sands resort. The company is preparing for further expansion with a fourth tower expected to open by 2031, supported by $8 billion USD in investments. This strategic growth has solidified LVS’s position in an industry with high barriers to entry due to strict government regulations.

Technical Analysis: Price and Market Trends

The technical outlook for Las Vegas Sands appears promising, with the stock trading below its fair value estimate of $60 USD, indicating room for growth. The stock has been trading within a 52-week range of $36.62 USD to $56.61 USD, with the current price of $49.50 USD offering investors a discount relative to the fair value estimate.

Based on candlestick analysis, the stock has recently seen consistent buying pressure at key levels, signaling positive sentiment. The Fibonacci retracement levels for LVS suggest support at $45 USD, with resistance near $55 USD. If the stock breaks above this resistance level, it could signal further upside towards its fair value.

Additionally, LVS’s support level at $45 USD provides a solid floor, while the resistance at $55 USD will be the key level to watch for any breakout. These levels align with the company's market fundamentals, showing robust growth in its core markets despite external uncertainties.

Competitors in the Sector

Las Vegas Sands operates in a competitive environment, with significant players like MGM Resorts International (MGM) and Wynn Resorts Ltd. (WYNN). Here's a look at how they compare:

MGM Resorts: With a fair value estimate of $51 USD per share, MGM is seen as undervalued. However, its competition with Sands in Macao could intensify as new properties in the region come online.
Wynn Resorts: With a higher fair value estimate of $113 USD, Wynn has a broader reach in luxury and gaming but faces similar risks in Macao and Singapore.
Despite the competition, Las Vegas Sands continues to hold a strong position with its unique market access and ongoing investments.

Actionable Insights for Investors

Fair Value vs. Current Price: The current price of $49.50 USD presents an opportunity for investors, as it trades below its fair value estimate of $60 USD, indicating a potential upside of approximately 21%.
Long-Term Growth: Investors with a long-term horizon should focus on LVS’s strategic investments in Macao and Singapore, which are expected to fuel revenue growth in the coming years.
Technical Levels: Key technical levels suggest support at $45 USD and resistance at $55 USD. A break above the resistance could drive the stock towards its fair value.
As always, investors should conduct their own due diligence and carefully consider their financial goals before making any investment decisions.