Why this casino stock is down despite analyst upgrade
|Las Vegas Sands stock had a volatile trading day.
Las Vegas Sands (NYSE: LVS) stock has been fairly volatile today, with significant price swings in both directions.
The leading casino stock jumped at the opening bell after surging some 2.5% in premarket trading. The catalyst was likely a major ratings upgrade from Goldman Sachs to buy.
But as the trading day progressed, the stock price swung lower, dropping to around $66.50 – down about 1% on the day. So, what caused the selloff?
After a solid open, the stock moved lower after investors learned that Las Vegas Sands CEO Robert Goldstein sold $50 million worth of company stock, or roughly 750,000 shares, according to SEC filings posted this week.
Goldstein sold some 15,000 shares on December 12 and then another approximately 735,000 shares on December 15 for roughly $66 per share.
Earlier in December, SEC filings show Goldstein selling another roughly 400,000 shares of Las Vegas Sands stock at around the same share price.
Following the moves, he still owns about 1.25 million shares in the company.
Why the CEO was selling shares
When a CEO or top executives sell shares, it can raise a red flag for investors, even though its not always cause for concern. If the stock has been on a nice run, it could be a case where they are taking profits, selling high.
That could be a possibility with Goldstein, as the stock price is up about 29% year-to-date and is near a 52-week high.
But there is likely another reason why the CEO is cashing out shares. Next March, Goldstein is stepping down as chairman and CEO of the company, roles he’s served in since 2021. Before that, he held various leadership positions in the company since joining in 1999.
In March of 2026, Goldstein will transition to a new position, senior advisor, until 2028. In that capacity he will assist management with government relations activities, gaming strategy, and new physical development opportunities.
So, given that he is stepping down as CEO and reducing his role, it is probably a situation where he is preparing for retirement. In other words, it shouldn’t be too concerning for investors, although it likely sparked the selloff on Wednesday.
Is Las Vegas Sands stock a buy?
As for the Goldman Sachs upgrade, the Wall Street firm bumped up Las Vegas Sands price target to $80 per share, from the previous target of $64. That would suggest about 20% upside for the stock price.
Goldman Sachs analyst Lizzie Dove Dove cited sustained growth in gross gaming revenue from its five casinos in Macau next year, according to the research note, per Investors Business Daily.
In addition, Dove wrote that LV Sands’ Singapore casino is “firing on all cylinders,” per IBD, and gaining market share.
Unlike other casino operators, Las Vegas Sands doesn’t own any properties in Las Vegas, despite its name. The pullback in Vegas visitation has been a drag on earnings for other casino companies, while gambling in Macau and Singapore has been surging.
Today’s volatility aside, Las Vegas Sands still looks like a solid option. While the P/E ratio has jumped to 30, it still looks good long-term with a 5-year PEG ratio of 0.98, suggesting a good value relative to future earnings potential.
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