2023-05-01 08:43:12 ET
Macau casino stocks broke higher early on Monday after gross gaming revenue was reported to have soared 450% year-over-year and 15.6% sequentially in April to beat the consensus estimate of analysts. The GGR tally was the highest since before the pandemic first starting having an effect on the region in January of 2020.
"We think April’s market wide GGR suggests that mass GGR likely recovered to ~75-85% of April 2019’s so a nice pick up from the ~65% recovery during 1Q23. VIP has to be close to 25% recovered, driven by the Direct VIP segment.
JPMorgan continues to think that the thesis of all roads lead to Macau is very much intact, given steady, sequentially growing recovery that is still in its relatively early innings. The firm has Overweight ratings on Las Vegas Sands ( LVS ), MGM Resorts International ( MGM ), Melco Resorts ( NASDAQ: MLCO ), and Wynn Resorts ( WYNN ).
Looking ahead, Roth MKLM analyst Edward Engel noted five of Macau's six operators report quarterly results over the next week or two. The firm expects each management team to discuss quarter-to-date trends in what could be an incremental catalyst for the group.
"Macau stocks are trading at 12x 2019A EBITDA, which is near the mid-point of long-term averages. However, if Mass GGR over Labor Day exceeds 2019 levels we believe investor focus will shift from a GGR recovery to GGR growth vs. 2019." he updated.
Shares of Wynn Resorts ( WYNN ) rose 1.86% in premarket trading on Monday. Melco Resorts & Entertainment ( MLCO ) jumped 3.69% and Las Vegas Sands ( LVS ) gained 1.88% . MGM Resorts ( MGM ) showed a 1.27% rise in the early session.
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- View the growth metrics on Melco Resorts & Entertainment
- View the growth metrics on Las Vegas Sands
- Dig into the Seeking Alpha Quant Rating across the casino sector
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Macau casino stocks rally as analysts eye return of revenue to pre-pandemic levels