Las Vegas Sands surges after earnings beat, 20% dividend hike
Macau recovery drives EBITDA gains of 50% as casino operator returns $500M to shareholders
Las Vegas Sands shares rose sharply Thursday after the casino operator reported fourth-quarter earnings that crushed analyst expectations and announced a 20% dividend increase, underscoring the continuing recovery of its Asian gaming properties.
The company reported adjusted earnings per share of $0.85, beating Wall Street estimates of $0.62 by 37.7%. Revenue climbed 25.9% year-over-year to $3.65 billion, according to the company's earnings release.
The standout performance came from Marina Bay Sands in Singapore, where EBITDA surged 50% year-over-year to $806 million, reflecting the return of high-rolling gamblers and international tourists to the integrated resort. The property has been a key driver of profitability for Las Vegas Sands since its opening in 2010.
"We're seeing robust demand across all of our properties, particularly in Singapore where premium mass and VIP segments have shown remarkable resilience," the company said in a statement accompanying the results.
The strong quarter allowed management to increase the quarterly dividend to $0.30 per share, up 20% from the previous payout. Additionally, the board authorized share repurchases totaling $500 million during the quarter, returning capital to shareholders while signaling confidence in future growth prospects.
Analysts at major firms have maintained bullish outlooks on Las Vegas Sands, with an average target price of $69.50, according to market data. The stock currently trades at $61.26, giving it room for potential upside of approximately 13% to reach consensus targets. The company commands a forward price-to-earnings ratio of 17.89, suggesting investors are pricing in continued growth.
Las Vegas Sands' portfolio consists of iconic properties in Macau, including The Venetian Macao and The Parisian Macao, along with Marina Bay Sands in Singapore. The company exited the Las Vegas market in 2022, selling The Venetian and Palazzo properties to focus entirely on Asian gaming operations, which typically generate higher profit margins.
The Macau market has been gradually recovering from the COVID-19 pandemic, which decimated gaming revenue in the world's largest casino hub. Chinese officials have implemented various measures to revitalize the former Portuguese colony's economy, including visa facilitations for mainland tourists and infrastructure investments. These efforts appear to be paying off for operators like Las Vegas Sands, which derives the bulk of its revenue from the region.
Institutional investors own 42.8% of Las Vegas Sands shares, while insiders control 57%, according to recent filings. The high insider ownership aligns management interests with shareholders, a factor often cited by analysts as a positive governance characteristic.
The company's 52-week range shows significant volatility, with shares trading as low as $29.72 and as high as $70.45 over the past year. The current price of $61.26 represents a substantial recovery from the lows and puts the stock within 13% of its annual high.
Looking ahead, investors will be watching for signs of sustained recovery in Macau's VIP gaming segment, which historically generated outsize profits for Las Vegas Sands but has been slower to rebound than mass-market gaming. The company's ability to maintain its cost discipline while investing in property upgrades and marketing initiatives will be critical to sustaining momentum.
Las Vegas Sands' strong earnings beat and capital return program come at a time when other casino operators are also benefiting from the tourism recovery, particularly in Asia. The integrated resort model, which combines gaming with luxury hotels, shopping, dining, and entertainment, has proven resilient as consumers increasingly seek experiential luxury spending.
With a market capitalization of $41.2 billion and EBITDA of $4.3 billion over the past 12 months, Las Vegas Sands remains the largest publicly traded casino operator by market value, commanding premium valuations compared to peers that have exposure to more competitive domestic markets.