Las Vegas Sands Corp. LVS is poised to benefit from strong momentum in the Macau market, recovery in Singapore’s travel demand and robust capital return initiatives. Also, strategic investments in infrastructure development bode well. However, an uncertain macro environment and stiff competition are concerning.

Let’s delve deeper.

Factors Likely to Drive Growth

The Macao market continues to grow. During the fourth quarter of 2024, total gaming revenues in the market increased 6% year over year. Mass gaming revenues also saw a 5% year-over-year rise. Backed by long-term commitment investments, Las Vegas Sands aims to capitalize on the likely structural growth in Macao in the coming years to stay ahead of the curve in terms of the quality and scale of its products and amenities. The company remains focused on expanding non-gaming opportunities in Macao. The outlook for Macao remains positive, with gross gaming revenues expected to surpass $30 billion in 2025 and grow annually thereafter.

Beyond Macao, Las Vegas Sands is benefiting from a strong tourism rebound in Singapore, supported by continued investments in Marina Bay Sands ("MBS"). In the fourth quarter, MBS posted net revenues of $1.14 billion, up from $1.06 billion a year ago, with strong gains across casino, hotel and retail segments. Mass gaming revenues rallied 28% year over year to $746 million, marking a 71% jump from pre-pandemic levels. With a $1.75 billion investment program nearing completion in mid-2025, LVS expects further growth as Singapore attracts more high-value tourists.

LVS’ strategy revolves around investing in scalable, high-quality assets that deliver superior returns on capital. With a strong presence in gaming and non-gaming segments, the company is positioned to capture a growing share of high-value tourism and leisure spending. The ongoing investments in infrastructure ensure a solid foundation for sustained long-term growth.

Las Vegas Sands is dedicated to rewarding its shareholders through significant capital returns. In the fourth quarter of 2024, the company repurchased $450 million worth of its stock and increased its annual dividend to $1 per share for 2025. Additionally, it has strengthened its stake in Sands China, purchasing $250 million worth of shares and raising its equity interest to 72.3%. Management remains committed to utilizing capital return programs to enhance shareholder value.

Concerns for LVS Stock

Shares of Las Vegas Sands have declined 20% in the past six months against the industry’s 1.3% rise. The downside was due to an uncertain macroeconomic environment.

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The competitive landscape in Macau and Singapore is becoming increasingly challenging. LVS faces direct competition from numerous casinos in Macau, with additional facilities announced by rivals further intensifying the market dynamics. Beyond Macau, the company competes with gaming operators in South Korea, Malaysia, the Philippines, Australia and Cambodia, as well as online gaming platforms and cruise ships offering casino experiences. Additionally, new gaming developments in Malaysia, Australia and South Korea, along with potential casino legalization in Japan, Thailand and Vietnam, could divert customers away from LVS properties. The rapid expansion of online gaming and sports betting adds another layer of competition, which could materially impact LVS’ financial condition, operations and cash flow.

LVS operates globally, making it vulnerable to foreign currency fluctuations. The company records transactions in the functional currencies of its subsidiaries, but since financial statements are reported in U.S. dollars, exchange rate volatility can impact revenues, expenses and overall financial performance. The strengthening of the U.S. dollar against the Singapore dollar (SGD), Macau pataca (MOP) or Hong Kong dollar (HKD) could materially affect LVS’ financial results.

LVS’ Zacks Rank and Stocks to Consider

Las Vegas Sands currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Zacks Consumer Discretionary sector are RCI Hospitality Holdings, Inc. RICK, Mattel, Inc. MAT and Royal Caribbean Cruises Ltd. RCL.

RCI Hospitality currently sports a Zacks Rank #1 (Strong Buy). The company delivered a trailing four-quarter earnings surprise of negative 62.9%, on average. The stock has declined 21.2% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for RCI Hospitality’s 2025 sales and EPS indicates growth of 2.5% and 1,278.8%, respectively, from year-ago levels.

Mattel currently flaunts a Zacks Rank #1. The company delivered a trailing four-quarter earnings surprise of 37.6%, on average. The stock has declined 0.2% in the past year.

The Zacks Consensus Estimate for Mattel’s 2025 sales and EPS indicates growth of 1.4% and 4.9%, respectively, from year-ago levels.

Royal Caribbean currently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter earnings surprise of 15.7%, on average. The stock has rallied 58.3% in the past year.

The Zacks Consensus Estimate for Royal Caribbean’s 2025 sales and EPS indicates growth of 9% and 26.4%, respectively, from year-ago levels.

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Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report

Mattel, Inc. (MAT) : Free Stock Analysis Report

Las Vegas Sands Corp. (LVS) : Free Stock Analysis Report

RCI Hospitality Holdings, Inc. (RICK) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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