Las Vegas Sands stock rallied after receiving an upgrade from Jefferies analyst David Katz, who raised the rating to "buy" from "hold" with a new price target of $69, up from $60. This represents a potential 38% upside from current levels.

The upgrade is based on expectations of an improving Chinese economy and Macau's gaming market recovery. Katz projects Macau's gross gaming revenue (GGR) will reach pre-pandemic levels by 2026, after achieving 80% of those highs in 2024. Last year, Macau concessionaires generated $28.3 billion in GGR, marking a 24% year-over-year increase.

Several factors support the optimistic outlook for Las Vegas Sands:

• Completion of Londoner Macau upgrades in H1 2025
• Potential Chinese monetary stimulus boosting consumer spending
• Strong positioning in mass and premium mass market segments
• Trading metrics: 20x earnings, 12.5x price-to-free cash flow, and 11x EV/EBITDA

In related news, Jefferies also upgraded Boyd Gaming (NYSE: BYD) to "buy" with a $92 price target, citing potential catalysts including:

• Opening of temporary casino in Norfolk, Virginia
• Undervalued 5% stake in FanDuel
• Strong regional casino portfolio across multiple states

The upgrades mark a positive start to 2025 for gaming stocks, following a challenging 2024 where Las Vegas Sands gained only 4%, significantly underperforming the broader S&P 500 index.

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