“We see little reason for heroic forecasts at current valuation levels,” Deutsche Bank analyst Carlo Santarelli wrote of Las Vegas Sands, “as shares remain inexpensive, even on the well-below-consensus revisions.” Santarelli made his views known in an April 15 investor note.
Sands’s price target was lowered to $59 per share from $62 by Santarelli. The stock was trading at $32.09 a share at that time, having lost 22 percent of its value since new tariffs were imposed on China, where Sands does most of its business.
In order for Sands to turn around, Santarelli wrote, four things needed to happen. First, gambling revenues in Macau have to accelerate. Also, they need to keep speeding up, as well as stabilize, in the second quarter of 2025. (Casino winnings dipped in early April.)
Santarelli also prescribed “a cooling geopolitical environment” and, finally, “a change in sentiment around the macro-economic picture in China … We believe these items … would set [Sands] up well to work as an inexpensive, beat-and-raise story, as we move through 2025.”
The analyst reiterated that the current conditions were “challenging, given the specter of negative revisions at present.”
Citing lower market growth and “more subdued” expansion of the Macanese market, Santarelli lowered his estimates for Sands. He put his cash flow forecasts 13 percent below Wall Street consensus for the first quarter, eight percent under for the whole year, and six percent beneath the Street for 2026.
Santarelli noted a slowdown in Macau’s revenue growth, on pace to be only one percent for the first quarter of the year, when expectations had been higher. Calling this number a disappointment, Santarelli added that greater concern was a negative trend in mass-market gambling, where profit and cash-flow margins tend to be high.
The Deutsche Bank report continued that Sands investors hadn’t expected the company to expand its Macanese market share in the first quarter, due to incremental room-inventory increases. However, Santarelli believes it has seen a slight contraction of market share.
The analyst placed Sands’s Macau market share at 22.4 percent, still good enough for first place. Its next-closest rival, Galaxy Entertainment, was pegged at 20.2 percent. The four remaining operators were roughly equal in market share: MGM Resorts International (15.8 percent), Melco Resorts & Entertainment (14.6 percent), SJM Holdings (13.4 percent) and Wynn Resorts (13.4 percent).
He predicted first-quarter revenue of $1.58 billion to $1.63 billion, where Wall Street anticipates $1.8 billion. “Importantly, we believe [Sands] has largely remained above the fray, with respect to aggressive promotional activity, some of which has contributed to the share losses,” Santarelli added.
Turning to Sands’s Singapore front, Santarelli wrote that Marina Bay Sands “has been showing a healthy growth trajectory, largely on autopilot for the investment community.” However, he noted challenging comparisons during the first six months of the year compared to strong 2024 numbers.
“We believe these forecasts, while assuming some market share expansion, are appropriate, given the potential variance that exists at present, and with shares at what we deem to be very inexpensive levels,” Santarelli summarized. He also kept a Buy rating on the stock.
