JPMorgan estimates Macau gross gaming revenue will fall 2% Y/Y after a strong early start to the month is more than offset by the impact of the slowdown in front of the earlier Chinese New Year this year.
"We wouldn’t be surprised to see January printing flat or even marginally positive growth in GGR," notes analyst DS Kim.
Due to the Chinese New Year, Kim notes that it's more meaningful to look at January-February combined trends, which the firm models to decline 3% to 4%.
"We stay positive on Macau stocks. Despite the recent share rebound, the sector’s valuation still appears inexpensive at 12x 2020E EV/EBITDA (vs. historical average of ~14x), which we view as quite attractive given limited estimate risks to consensus. Added to this is our view that 2020 will see a cyclical rebound in demand, and we stay constructive on the sector."
Macau casino stocks: Wynn Macau (OTCPK:WYNMF, OTCPK:WYNMY), Wynn Resorts (NASDAQ:WYNN), Sands China (OTCPK:SCHYY, OTCPK:SCHYF), Las Vegas Sands (NYSE:LVS), MGM China (OTCPK:MCHVF, OTCPK:MCHVY). MGM Resorts (NYSE:MGM), Galaxy Entertainment (OTCPK:GXYEF), SJM Holdings (OTCPK:SJMHF, OTCPK:SJMHY), Melco Resorts & Entertainment (NASDAQ:MLCO), Studio City International (NYSE:MSC).
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