Zacks Investment Research downgraded shares of Las Vegas Sands Corp. (LVS) from OUTPERFORM to NEUTRAL on August 13, 2012, with a target price of $42.00.
LVS' second-quarter results lagged the Zacks Consensus Estimate by $0.15. Adjusted EBITDA and earnings declined 6.3% and 18.5%, respectively. The results were disappointing due to lower hold on Table games play in core markets and slowdown in Las Vegas. We remain cautious on the stock because of stiff competition and heavy reliance on debt financing and capital market for development. However, considering the significant cash flow in Macao and Singapore in the second quarter, we believe the segment to be a major growth driver in the near term. We also view the company's Sand Cotai Central project as a long-term catalyst, considering the successful opening of its Phase I. Hence, we remain neutral on the stock.
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