When you’re putting together a formula for success a dividend cut and an earnings miss usually aren’t on the list. Unfortunately for today’s Bear of the Day that’s exactly what we got. A downturn in the Asian gaming industry made it very difficult for Las Vegas Sands (LVS – Analyst Report) to meet expectations.
Las Vegas Sands is a hotel, gaming, and retail mall company headquartered in Las Vegas, Nevada. The company owns The Venetian Resort Hotel Casino, the Sands Expo and Convention Center, Venetian Interactive, and Venetian Macao Limited.
Earnings for Q1 came in at 66 cents per share versus the Zacks Consensus Estimate of 74 cents. This 8 cent missed came on the heels of a surprising Q4 2014 that saw the company beat earnings by 11 cents, coming in at 92 versus expectations for 81 cents.
The miss prompted analysts to revise numbers to the downside for the current quarter, next quarter, the current year and next year. The most dramatic moves are for the current year and next year. Over the last 30 days nine analysts have dropped their estimates for those two periods. The bearish sentiment has dropped current year consensus from $3.25 to $2.82 for the current year and slashed next year’s Zacks Consensus Estimate from $3.59 to $2.87.
The bad news didn’t end there. Las Vegas Sands had to slash its dividend down to 50 cents per share from the lofty $1.50 mark. As you can imagine, the share price took a tumble following the news. After closing the session at $55.39, shares opened for trading the day following the report down at $53.50 and traded as low as $52.01. Since then, there has been little support, with the stock unwinding again yesterday.
The Commodity Channel Index is well oversold at -186.96 but there doesn’t seem to be many buyers willing to step in ahead of support. The last time the stock traded this low was March 11th when shares reached $50.63. That level is the next likely support. With the 21 day moving average well above the current price at $56, the stock is decidedly in a bearish trend.
Investors looking for other stock ideas within the Gaming industry that ranks in the Bottom 30% of our Zacks Industry Rank can investigate Zacks Rank #1 (Strong Buy) stocks Churchill Downs (CHDN – Snapshot Report) and Isle of Capri (ISLE – Snapshot Report).