Skip to Content
Stock Analyst Update

Las Vegas Sands Has Industry-Leading Liquidity Position

We see shares as attractive for the narrow-moat firm and don't plan to change our fair value estimate.


Las Vegas Sands (LVS) first-quarter update supports both our stance that the Macau (59% of 2019 EBITDA) gaming market is positioned for a full recovery post coronavirus containment and our view that the company holds an industry-leading liquidity position. Encouragingly, Sands strong balance sheet allows it to continue key investments in Macau and Singapore, which will support its regulatory advantage (source of its narrow moat). We don’t plan to materially change our $65 fair value estimate and see shares as attractive.

Sands mentioned several times throughout its earnings call that it expects Macau gaming demand to return quickly once quarantine and visa restrictions are lifted, which the company thinks could begin in late May and continue in phases through the summer. Sands’ view is based on conversations with its customers and on the historical context that Asian demand for gaming has returned quickly after prior health crisis’s (SARS and swine flu). In the company’s determination, the Asians’ familiarity with disease outbreaks will allow both the Macau and Singapore (31% of 2019 EBTDA) gaming markets to recover more quickly than the Las Vegas (10%) market in the U.S., although Sands noted solid group booking trends for Vegas in late 2020 and through 2021. We don’t plan to materially alter our existing forecast for Macau industry gaming revenue to return to 2019 levels in early 2022.

Sands robust liquidity profile is also encouraging. At the end of March, the company had $2.6 billion in cash and $3.9 billion in untapped credit availability. Meanwhile, its monthly cash burn at near zero revenue generation is $220 million. This positions the company with enough funds to operate for the next 18 months under current conditions, while still investing in its existing Macau and Singapore assets. In fact, its Londoner renovation in Macau remains on track to open in phases throughout 2020 and 2021, while its expansion in Singapore is still scheduled to open in 2022.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.

Dan Wasiolek does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.