Las Vegas Sands Has 'Favorable Bias' Before Earnings

As Q4 earnings season for casino operators kicks off, a pair of top Wall Street firms prefer Las Vegas Corp. LVS as a top pick in the space ahead of earnings.

In a new report, Susquehanna analyst Rachael Rothman says that she doesn’t expect many surprises out of Sands and Macau rivals Wynn Resorts, Limited WYNN and MGM Resorts International MGM in Q4.

“Given monthly reporting of Vegas and Macau trends, as well as WYNN’s 4Q preannouncement, we expect unsurprising quarters for LVS, MGM and WYNN with investors more focused on the 2016 outlook than recent results,” Rothman explains.

Related Link: Why Credit Suisse Is Still Waiting To Upgrade Wynn Resorts

Susquehanna maintains Positive ratings on Sands and MGM and a Neutral rating on heavily VIP-exposed Wynn.

Deutsche Bank analyst Carlo Santarelli concurs that Q4 earnings will likely not hold many surprises, but is positive on Sands ahead of earnings.

“Given current FCF valuation, and despite our views of medium term competitive headwinds, we believe risk-reward into the print is skewed to the upside,” Santarelli says.

Deutsche Bank maintains a Hold rating on Sands and a $42 price target.

Disclosure: the author owns shares of Wynn.