It may be luckier to bet at a casino than to invest in one, according to Goldman Sachs, which last week removed Las Vegas Sands from its Conviction Buy list acting on less than robust news from Macau.
Although Sands is considered among the best of the gaming stocks, the industry appears to be entering a sluggish period. Sands and MGM Resorts stocks have declined 20 percent this year, with Wynn Resorts declining by 30 percent in reaction to the departure of its founder, Steve Wynn, over sexual misconduct accusations. The other stocks were pummeled by poor earnings and worries over a slowdown in Macau.
Although Goldman Sachs’s analyst Stephen Grambling has removed Sands from the Conviction Buy list, he has kept it on the Buy rating, writing: While we believe valuation is now embedding a more severe scenario than we anticipated, we continue to believe LVS has the best exposure to ongoing secular growth in the mass market.”
In the stock’s favor is the company’s decision to diversify its holdings away from gaming, so that it shouldn’t be as impacted by market forces acting on gaming alone. Grambling also approvingly notes the company’s modernization of its Singapore properties, and potential for expanding into Japan should that nation legalize gaming.
