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JPMorgan are buyers of U.S.-listed Macau-centric stocks

Published 2023/04/03, 14:54
© Reuters.
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MGM
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LVS
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By Sam Boughedda

Macau's gross gaming revenue (GGR) in March was up 23% sequentially, according to JPMorgan (NYSE:JPM) analysts in a note to clients on Monday.

In a boost for companies including Las Vegas Sands Corp (NYSE:LVS), Wynn Resorts Limited (NASDAQ:WYNN), MGM Resorts (NYSE:MGM), and Melco Resorts & Entertainment Ltd (NASDAQ:MLCO), the analysts told investors that they are buyers of U.S.-listed Macau-centric stocks in its coverage universe.

The analysts also noted that GGR was up 247% year-over-year, although the YoY comparison was "easy" due to the COVID-19-related restrictions in China last year.

"March's GGR per day of MOP411m tops that of the ~MOP360m run-rate post the seasonally strong Lunar New Year holiday. Impressive," the analysts wrote. "In other words, March's better-than-expected results should reassure investors of the market's recovery. Even more importantly, March's results likely imply an acceleration in the mass table game segment – probably north of 70% in relation to pre-COVID levels and up sequentially from the 60-65% levels in January and February."

They added that while the first quarter gaming revenue recovery is "more or less telegraphed by these March/1Q23 results," they think EBITDA margins should surprise to the upside.

"We see the 1Q23 earnings season as not only generating 1Q23 upside but, more importantly, setting the stage for 2Q23 and beyond margin-upside-driven positive earnings revisions. Because of this, we think Macau stocks have the best risk-reward of anything in our coverage universe. So, we are buyers of WYNN, MLCO, MGM, and LVS, each rated Overweight," the analysts concluded.

 
 

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