CLSA Upgrades WYNN MACAU and Melco Resorts & Entertainment Limited to Outperform, Adjusts TP for Macau Casino Stocks
I'm LongbridgeAI, I can summarize articles.CLSA upgraded Wynn Macau and Melco Resorts to Outperform, adjusting target prices for Macau casino stocks. The broker lowered FY2026 GGR forecasts due to weak VIP hold rates and margin pressure, expecting an 8.6% EBITDA decline in 2Q26. Despite near-term headwinds, CLSA anticipates recovery from mid-July and maintains Galaxy Entertainment as its top pick, citing attractive valuations at 8.2x FY2027 EV/EBITDA.
CLSA published a report expecting Macau's gaming industry EBITDA for 2Q26 to decline 8.6% YoY to USD1.85 billion, as industry GGR fell 0.1% and margins remained under pressure. Based on channel checks, VIP hold rates during the quarter may have been below normal levels. The broker lowered its July GGR forecast and believes market consensus forecasts may face downward revisions. Nevertheless, Macau's daily average GGR should recover from mid-July onward. The sector is currently trading at 8.2x FY2027 EV/EBITDA. Based on valuation, the broker upgraded WYNN MACAU (01128.HK) -0.080 (-1.541%) Short selling $5.62M; Ratio 41.434% and Melco Resorts & Entertainment Limited (MLCO.US) to Outperform and adjusted TP for Macau gaming stocks. GALAXY ENT (00027.HK) -0.560 (-1.779%) Short selling $231.73M; Ratio 43.960% remains its top pick.
Channel checks by the broker showed that during a nine-week survey in 2Q26, VIP hold rates were below normal levels in seven weeks. Casino operators with higher GGR contribution from VIP gaming were more likely to record below-normal VIP hold rates. On a YoY basis, the broker expects GALAXY ENT (00027.HK) -0.560 (-1.779%) Short selling $231.73M; Ratio 43.960% , SANDS CHINA LTD (01928.HK) -0.170 (-1.274%) Short selling $38.91M; Ratio 28.882% , MGM CHINA (02282.HK) -0.390 (-3.721%) Short selling $7.94M; Ratio 30.031% and WYNN MACAU (01128.HK) -0.080 (-1.541%) Short selling $5.62M; Ratio 41.434% to gain GGR market share.
After incorporating actual June GGR data and lowering its July forecast to a 12% YoY decline, the broker cut its FY2026 GGR forecast by 2%. CLSA now expects FY2026 GGR to rise only 2% YoY to MOP253.2 billion, 3.5% below market consensus. The forecast implies a 2% YoY decline in GGR during 2H26. The broker also lowered FY2027 and FY2028 forecasts by 1% due to adjustments to low-season assumptions. Earnings forecast changes mainly reflected lower industry GGR projections.
CLSA continues to prefer companies capable of maintaining revenue and margin market share, with strong balance sheets and, ideally, clear commitments to increasing dividends. However, the broker believes market consensus earnings forecasts may face downward revisions in the near term, as current market consensus for FY2026 GGR growth implies that daily average GGR in 2H26 would accelerate to MOP729 million, compared with the actual MOP701 million in 1H26.
The broker said sector valuations are not demanding. The latest rating and TP adjustments are as follows:
Stock|Rating|TP (HKD)
GALAXY ENT (00027.HK) -0.560 (-1.779%) Short selling $231.73M; Ratio 43.960% |Outperform|HKD41.4->HKD41.5
MGM CHINA (02282.HK) -0.390 (-3.721%) Short selling $7.94M; Ratio 30.031% |Outperform|HKD14.5->HKD14.1
SANDS CHINA LTD (01928.HK) -0.170 (-1.274%) Short selling $38.91M; Ratio 28.882% |Outperform|HKD17.3->HKD17.2
Melco Resorts & Entertainment Limited (MLCO.US) |Hold->Outperform|USD6.1->USD6
WYNN MACAU (01128.HK) -0.080 (-1.541%) Short selling $5.62M; Ratio 41.434% |Hold->Outperform|HKD5.6->HKD5.5
SJM HOLDINGS (00880.HK) -0.010 (-0.662%) Short selling $4.81M; Ratio 34.730% |Underperform|HKD1.4
(da/u)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-07-10 16:25.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)