July 25, 2022, Endeavor Group Holdings, Inc. (NYSE:EDR) and Las Vegas Sands Corp. (NYSE:LVS)
The world is reopened, and there’s no turning back. These entertainment and hospitality companies could be the best stocks to buy now.
Despite Friday’s downturn, stocks ended the week green. Although recession risks are mounting, stock and bond markets are likely already pricing in most of the worst news. The time is now to start getting a bit bolder and more opportunistic. That’s why Endeavor Group Holdings, Inc. (NYSE:EDR) and Las Vegas Sands Corp. (NYSE:LVS) are two of the best stocks to buy now.
Analysts clearly know something, too. These two stocks have been two of the most consistently upgraded since May. LVS, notably, received FIVE analyst upgrades in one day (July 21, 2022).
Endeavor is an entertainment, sports, and content giant. It operates in three segments- Owned Sports Properties, Events, Experiences & Rights, and Representation. It is one of the best stocks to buy now because it represents some of the most well-known names in sports and entertainment and owns prominent sports properties like the UFC. While it currently trades at a high earnings multiple, that tends to happen when you’re immensely profitable, and your net income could surge 280+%. Analysts love this stock, too. Just look at its coverage since May 13, 2022. Its 100% STRONG BUY rating and 51.38% average analyst upside speak volumes.
Las Vegas Sands Corp. is another of the best stocks to buy now. The stock has been on fire over the last week and since May. It develops, owns, and operates integrated resorts throughout Asia and the United States and could stare at a 20+% upside. China’s Zero-COVID policy could be a concern with its Macau properties. However, momentum in Singapore and its Vegas properties, the Venetian and the Sands, expose it to nearly pre-pandemic gaming figures.
This is only the tip of the iceberg, though. There are countless other reasons why these two players could be the best stocks to buy now.
Endeavor Group Holdings, Inc. (NYSE:EDR)
Analysts since May have given this entertainment giant bullish coverage with 50+% of upside on average.
Endeavor powers the entire sports and entertainment industry behind the scenes more than you probably realized.
Casual sports fans may know Endeavor best as the parent company behind the potentially $10 billion UFC. That alone makes it one of the best stocks to buy now (especially with some big events coming up). However, this entertainment giant works with or represents some of the world’s most famous film, TV, sports, culinary, and literary names.
A deeper dive into the Company shows that owning its stock isn’t too shabby either. Primarily based on its projected net income growth and sterling analyst upside.
Endeavor’s Earnings and Revenue Growth Prospects Are Off the Charts
Endeavor reports Q2 earnings in roughly two weeks (August 11, 2022), but its most recent report from back in May could be a sign of things to come. EPS came in at $0.73, easily topping the consensus estimate of $0.31 by $0.42. Revenue also came in at $1.47 billion during Q1, crushing analyst estimates of $1.28 billion.
Most importantly, after Endeavor reported a loss of $16.7M in Q4, it turned a profit of more than $500M in Q1.
With the Company also upgrading its FY guidance to $5.235 billion – $5.475 billion from $5.2 billion-$5.45 billion, its growth projections are officially off the chart.
Consider the following:
- Earnings are expected to grow by 62.61% in the coming year.
- Endeavor’s net income is forecast to grow 286.6% and average 71.8% over the next five fiscal years.
- Endeavor’s 5-year revenue CAGR is 16.5%.
On top of its growth prospects, though, a 49.9% gross margin and 7 out of 9 Piotroski Score, indicating healthy Liquid Balance Sheets, Profitability, and Operating Efficiency, help bolster its case.
So block out the Monkeypox scare and COVID variants. The world is charging forward, and Endeavor’s growth potential alone makes it one of the best stocks to buy now.
But there’s more…
Endeavor’s Stock is Charging Forward and Breaking Out Past Critical Levels
EDR had a lousy first half of the year and lost more than half its value between January 3, 2022’s high of $35.28 on May 9, 2022’s low of $17.42.
However, since then, EDR’s has officially broken out by 29.28% and rocketed past its 20-day and 50-day moving averages. With a 20 – 50 Day MACD Oscillator also flashing BUY signals and an RSI still nowhere near overbought, these gains could hold or increase significantly from here.
Judging from analyst activity since May, perhaps they know something too…
Endeavor Has a 50+% Upside and Has Received Only Positive Coverage Since May
TipRanks scores Endeavor a STRONG BUY. That’s because out of 11 Wall Street analysts offering 12-month price targets in the last 3 months, all 11 rated it a BUY. Its street-high price target is $44.00, while its low is $25.00, and its average is $34.09. The average price target represents a 51.38% upside from July 22, 2022’s closing price of $22.52.
A deeper dive into EDR’s analyst activity is even more encouraging. Since May 13, 2022, analysts have only upgraded, boosted, or maintained bullish coverage for the stock. Consider the following:
- Citigroup upgraded from NEUTRAL to BUY
- Barclays kept an OVERWEIGHT rating and boosted its target from $27.00 to $28.00
- Credit Suisse Group maintained an OUTPERFORM rating and a $40.00 price target
- Goldman Sachs upgraded from NEUTRAL to BUY
- UBS Group upgraded from NEUTRAL to BUY
- Deutsche Bank boosted its target from $39.00 to $40.00
EDR’s year-to-date low and high are $17.42 and $35.28, respectively.
Las Vegas Sands Corp. (NYSE:LVS)
This hospitality stock is on fire and could have an almost 21% average upside.
Every dog has its day, and finally, the day for Las Vegas Sands could be here. The international resorts giant has seen its stock get clobbered for much of the year. However, fortunes have dramatically changed in the last week, with the stock rocketing over 12%.
Moreover, since touching a 2022 low of $28.88 on May 12, 2022, the stock surged 35.01% to its close on Friday (July 22, 2022).
So what gives? With a significant presence in China and Macau, wouldn’t conventional wisdom tell you to be cautious? Perhaps. However, remember that this Company has quite a foothold in Las Vegas (hence its name). It will undeniably benefit from one of the most in-demand summer tourist seasons ever.
Moreover, as it sees 2019-like momentum in Singapore, expectations in Macau can’t get much worse.
These reasons alone make it one of the best stocks to buy now.
There might be even more to this story, judging by outstanding growth prospects and the fact that it received FIVE analyst upgrades in one day (July 21, 2022).
Especially with the stock still quite buyable at almost 20% below its highs.
Increasing Growth Projections
Although LVS missed Q2 EPS estimates, revenue came in well above expectations at $1.05 billion versus the consensus estimate of $975.3 million.
In the coming year, full-year earnings are also expected to turn positive from ($0.07) to $1.19 a share. Net income is also forecast to grow 33.0% and average 81.7% over the next five fiscal years.
Its 68.9% gross margin is also not a shabby foundation to build off of.
What’s most telling about its earnings report, though, is the day after, five analysts either upgraded or boosted their price targets (July 21, 2022).
We will go into further detail about these analyst upgrades. Wells Fargo was incredibly forthcoming, explaining three reasons it hiked its price target from $43.00 to $45.00.
- Attractive momentum in Singapore. Q2 mass table/slot GGR reached 90%+ of 2019 levels despite visitation/airlift still at/below 50% of 2019.
- Macau expectations can’t get much worse
- Its valuation.
Technical BUY Signals Are Mounting
As mentioned before, LVS currently trades roughly 20% below its highs. With the stock rocketing over 12% in the last week and 35.01% since touching mid-May’s lows, technical signs are beginning to reveal LVS as one of the best stocks to buy now.
BarChart mentions explicitly the following indicators as BUY signals:
- 20 Day Moving Average
- 20 – 50 Day MACD Oscillator
- 50 Day Moving Average
- 100 Day Moving Average
- 150 Day Moving Average
- 200 Day Moving Average
With Five Upgrades in One Day and a 20+% Upside, LVS is a No-Brainer
As we mentioned, LVS received FIVE; count it FIVE analyst upgrades in one day last week (July 21, 2022). This only happens if a stock is noticeably catching fire and analysts are unified in their views on its upside. Here is who upgraded their stock coverage:
- JPMorgan Chase & Co.- Boosted target from $42.00 to $44.00
- Stifel Nicolaus- Boosted target from $46.00 to $50.00
- Barclays- Kept OVERWEIGHT rating and boosted target from $39.00 to $43.00
- Citigroup- Kept BUY rating and boosted target from $56.00 to $58.00
- Wells Fargo & Company- Upgraded from EQUAL WEIGHT to OVERWEIGHT and boosted target from $43.00 to $45.00
Over the last 3 months, 9 Wall Street analysts offered 12-month price targets for LVS. LVS currently has a street-high price target of $59.00, a low of $37.00, and an average of $47.11. Its average price target represents a 20.83% upside from July 22, 2022’s $38.99 closing price.
LVS’s year-to-date low and high are $28.88 and $48.27, respectively.
