Morgan Stanley trimmed its price target on Las Vegas Sands to $66 from $67, maintaining an Equal Weight rating after the company’s fourth-quarter 2025 earnings highlighted diverging regional performance. While Singapore operations delivered robust growth and margin expansion, softer-than-expected results in Macau tempered the overall outlook. The modest target reduction reflects a recalibration of regional momentum rather than a deterioration in the broader investment thesis.

Strong Earnings Growth Driven by Singapore

Las Vegas Sands reported adjusted attributable net income of $579 million in Q4 2025, marking a 49.6% year-over-year increase from $387 million. Diluted earnings per share rose 57.4% to $0.85, aided by a $500 million share repurchase program that reduced outstanding shares by approximately 1.2%.

The standout contributor was Marina Bay Sands in Singapore. Adjusted property EBITDA surged 50.1% year over year to $806 million, supported by increased gaming volume and a 310-basis-point expansion in EBITDA margin to 50.3%. Positive hold variance — with actual hold at 4.36% versus an expected 3.90% — provided additional earnings leverage.

Singapore’s resilience underscores the strength of high-end tourism and premium gaming demand in the region. With limited competition and strong regulatory stability, Marina Bay Sands continues to serve as a cornerstone of the company’s cash flow profile.

Macau Performance Lags Expectations

In contrast, Macau operations underperformed relative to expectations. Adjusted property EBITDA rose just 6.5% year over year to $608 million. Margins contracted by 270 basis points to 29.5%, reflecting softer gaming volumes despite favorable hold variance of 3.92% versus an expected 3.30%.

Macau’s slower growth highlights ongoing challenges in China-linked visitation trends and premium mass segment recovery. While overall activity has improved from pandemic-era lows, normalization appears uneven. For investors, Macau remains the critical variable given its scale and exposure to broader Chinese economic dynamics.

Morgan Stanley’s target revision likely reflects caution regarding sustained margin pressure in Macau, even as Singapore offsets some of the drag.

Capital Allocation and Strategic Positioning

Las Vegas Sands continues to prioritize shareholder returns, as evidenced by its Q4 buyback activity. Balance sheet flexibility and strong Singapore cash generation support this approach. However, regional divergence creates valuation sensitivity, particularly if Macau’s rebound remains gradual.

The company’s portfolio — spanning flagship properties in Macau and Singapore — positions it squarely within the premium integrated resort segment. Yet performance dispersion between geographies may drive earnings volatility in coming quarters.

Looking ahead, investors will monitor visitation data, gaming volumes, and margin trends in Macau closely. Stabilization in Chinese consumer spending or policy support for tourism could act as catalysts. Conversely, persistent weakness may constrain multiple expansion despite solid Singapore fundamentals.

In the current environment, Las Vegas Sands presents a balanced risk-reward profile: strong cash flow from Singapore countered by near-term uncertainty in Macau. Morgan Stanley’s measured adjustment reflects that equilibrium rather than a structural shift in outlook.