Jefferies Cuts Las Vegas Sands Target to $61, Warns of 570 Bps Macau Margin Drop
Jefferies downgraded Las Vegas Sands to Hold, cut its price target to $61 from $72, and projects a 570 bps Macau EBITDA margin decline by 2027 driven by reinvestment in premium mass. The firm favors Wynn Resorts’ premium-focused model and forecasts a 4.7% drop in Nevada EBITDAR at Boyd Gaming.
1. Jefferies Downgrades Las Vegas Sands
Jefferies downgraded Las Vegas Sands to Hold from Buy, trimming its price target to $61 from $72. Analyst David Katz cited concerns over the operator’s strategic push into the premium mass segment in Macau, warning this investment will weigh on margins over the medium term.
2. Macau Margin Forecast
Katz projects a customer reinvestment strategy similar to Q4 2025 will cut Macau adjusted EBITDA margins by approximately 570 basis points by 2027 versus 2023 levels. This marks the steepest margin decline among peers, leading Jefferies’ FY26 and FY27 EBITDA estimates for Sands to sit 2.9% and 4.9% below consensus.
3. Preference for Wynn Resorts
In contrast, Jefferies favors Wynn Resorts due to its premium-focused operating model, which it believes positions the company for outperformance. The analyst highlights Wynn’s disciplined capital allocation and higher-margin offerings in Macau as key competitive advantages.
4. U.S. Gaming Outlook
On the U.S. gaming front, Jefferies notes that group and convention bookings on the Las Vegas Strip remain stable while leisure demand softens, forecasting a 4.7% year-over-year drop in Nevada EBITDAR at Boyd Gaming. Emerging iGaming legislation in Maine and an open casino license in Indiana are viewed as minimal competitive changes.