John Staszak Is Completely Wrong About Las Vegas Sands
I have been following Wynn Resorts and Las Vegas Sands for more than 10 years as these two companies give me a great barometer of the how the global economy is doing.
In April, Las Vegas Sands reported first quarter earnings of $0.91 per share vs expectations of $1.04. Nevertheless, Management stated they expect the gaming market in Macau to recover and spending $2.2 billion in Macau over the next three years. That makes since as the game revenue in Macau dwarfs Las Vegas by a factor of 6X.
John Staszak, an analyst with Argus Research had this to say about Las Vegas Sands in a recent article.
We are maintaining our buy rating on Las Vegas Sands. We are maintaining our 2019 estimate of $3.70. For 2020, we are keeping our estimate at $4.00 per share. Our long-term earnings growth rate estimate is 14%.
Our revised target price of $80 implies a multiple of 21.6-times our 2019 EPS estimate, which we view as reasonable, and a potential total return, including the dividend, of 22% from current levels.
John is so wrong, I won’t get into what’s happening in the world economy (US-China trade tariff as an example, a slowing global economy as another example, inversion of the yield curves around the world as another example), but Las Vegas Sands won’t see $80 again for years.
Lets go to the charts to find out why.
Price broke a long standing up trendline going back to January 2016.
Price formed a lower low and a lower high and the 12 simple moving avg. is pointing downward.
Thus, the chart suggests price is headed to down to the $40 level.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
Hopefully their balance sheet and that of its competitors are better than they were in 2007-2008 when they all almost disappeared during the financial crisis!
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I'm not quite sure, I would say since credit has been cheap for years, many companies are in no better shape vs. 2007.