Las Vegas Sands Corp. (LVS) shares rose more than 10% during Thursday's session after the company posted better-than-expected first quarter financial results. Revenue fell 51.2% to $1.78 billion, beating consensus estimates by $120 million, and GAAP net income was nil, beating estimates by 10 cents per share.
"Despite these circumstances, our balance sheet strength will enable us to emerge from this pandemic with all our promising future growth opportunities fully intact," said CEO Sheldon Adelson. "We remain extremely optimistic about an eventual recovery of travel and tourism spending across our markets."
JPMorgan issued an Overweight rating and $52 price target on Las Vegas Sands shares following the first quarter financial report. Analyst Joseph Greff believes that the company could benefit from improving trends in Macau, which was among the first gaming markets to experience a downturn due to COVID-19. In addition to these trends, Greff believes that Las Vegas Sands has an above-average liquidity position compared to its peers and that the stock offers a low entry point for new investors.
From a technical standpoint, the stock rebounded from trendline support toward the upper end of its price channel. The relative strength index (RSI) remains neutral with a reading of 50.02, while the moving average convergence divergence (MACD) remains in a fragile uptrend. These indicators suggest that the stock could have more room to run over the coming sessions.
Traders should watch for a breakout from upper trendline resistance toward the 50-day moving average at $49.86 or the 200-day moving average at $57.45. If the stock moves lower, traders could see a retest of lower trendline support. A breakdown from those levels could lead to a move toward reaction lows at $37.50 or $35.00.
The author holds no position in the stock(s) mentioned except through passively managed index funds.