JP Morgan is optimistic about the trend of Macau gaming stocks next year, with Galaxy Entertainment remaining the long-term top choice

JP Morgan's research report pointed out that, according to its verification, the total gaming revenue for the first 23 days of this month was MOP 15.6 billion, averaging MOP 678 million per day. Although last week's daily revenue decreased by 4% week-on-week due to a high base effect, dropping to MOP 642 million, the trend so far this month shows that revenue has increased by more than 10% compared to November last year, reaching the upper limit of JP Morgan's forecast, suggesting moderate upside potential for the bank's prediction of a 13% year-on-year growth in Macau gaming for the fourth quarter of this year.

JP Morgan believes that Macau gaming revenue is slightly strong, but the stock prices of gaming companies are slightly lower, while being optimistic about the trend of gaming stocks next year. In the short term (about 6 months), JP Morgan is optimistic about Sands China (01928.HK), as it expects the company to increase its dividend when announcing its performance at the end of February next year and to gain a larger market share and profit in the fourth quarter of this year.

In the long term (over 12 months), Galaxy Entertainment (00027.HK) remains JP Morgan's long-term favorite, as it believes it has strong value and long-term growth potential, along with the option for Phase IV development (expected to open in 2027), with the project's earnings likely to be reflected in the stock price sometime next year.

On the other hand, JP Morgan will continue to avoid Melco International Development (00200.HK) and Australian Gaming Holdings (00880.HK). JP Morgan's investment priority order for Macau gaming stocks is: Sands = Galaxy Entertainment (both ranked equally) > Wynn Macau (01128.HK) = MGM China (02282.HK) (both ranked equally) > Melco Resorts & Entertainment (MLCO.US) > Australian Gaming > Melco International.

For JP Morgan's ratings and target prices for Macau gaming stocks, please refer to another table