Market forces rained on the parade of Las Vegas Sands Corp. (NYSE:LVS) shareholders today, when the analysts downgraded their forecasts for next year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

After this downgrade, Las Vegas Sands' 17 analysts are now forecasting revenues of US$11b in 2021. This would be a major 24% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to surge 234% to US$1.49. Prior to this update, the analysts had been forecasting revenues of US$11b and earnings per share (EPS) of US$1.99 in 2021. The forecasts seem less optimistic after the new consensus numbers, with lower sales estimates and making a large cut to earnings per share forecasts.

See our latest analysis for Las Vegas Sands

Despite the cuts to forecast earnings, there was no real change to the US$57.94 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Las Vegas Sands at US$73.00 per share, while the most bearish prices it at US$47.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Las Vegas Sands' rate of growth is expected to accelerate meaningfully, with the forecast 24% revenue growth noticeably faster than its historical growth of 1.5% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 21% per year. Las Vegas Sands is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Las Vegas Sands. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Las Vegas Sands after the downgrade.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Las Vegas Sands, including its declining profit margins. Learn more, and discover the 1 other warning sign we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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