Time To Worry? Analysts Just Downgraded Their Las Vegas Sands Corp. (NYSE:LVS) Outlook

Today is shaping up negative for Las Vegas Sands Corp. (NYSE:LVS) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After this downgrade, Las Vegas Sands' 14 analysts are now forecasting revenues of US$5.1b in 2022. This would be a major 28% improvement in sales compared to the last 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting US$2.72 in per-share earnings. Before this latest update, the analysts had been forecasting revenues of US$6.4b and earnings per share (EPS) of US$0.18 in 2022. Thus, there's been a definite swing in sentiment, with the analysts making a considerable reduction to this year's revenue estimates, while at the same time substantially upgrading EPS. It's almost as though the business is forecast to reduce its focus on growth to enhance profitability.

Check out our latest analysis for Las Vegas Sands

The consensus has made no major changes to the price target of US$49.66, suggesting the forecast improvement in earnings is expected to offset the decline in revenues this year. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Las Vegas Sands analyst has a price target of US$67.00 per share, while the most pessimistic values it at US$39.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Las Vegas Sands' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 39% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 23% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 17% annually. Not only are Las Vegas Sands' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Las Vegas Sands going forwards.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Las Vegas Sands analysts - going out to 2024, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.