Visitors hold on finding their path to Las Vegas and that could live beneficial to casino operators’ first-quarter results.
Likewise, Macau concessionaires and online gaming firms are positioned to glean the benefits of resilient consumer outlay trends. Citing stability among consumers, Macquarie psychoanalyst Tchad Beynon Macau operators, online betting firms and Las Vegas Strip casino giants as the preferred slipway to spiel the come in with gaming suppliers and regional casino companies lagging behind that trio.
The psychoanalyst noted Caesars Entertainment (NASDAQ: CZR), MGM Resorts International (NYSE: MGM), and Wynn Resorts (NASDAQ: WYNN) are poised for mid- to high-single-digit beats of first-quarter revenue per available elbow room (RevPAR) estimates helped past last-place month’s Super Bowl.
Our analysis incorporates information for February, which came in at +63% YoY inwards Vegas (Super Bowl benefit),” wrote Beynon. “By comparison, this compares to the F1 benefit inward November, impulsive RevPAR maturation of +24%. We cerebrate MGM/CZR are amend positioned to captivate this benefit vs 4Q, when disruptions and a skewed to higher-end F1 customers affected results.”
He has “outperform” ratings on MGM and Caesars – the 2 largest Strip operators – and Wynn.
Decent Outlook for Macau
March is typically a decent month congeneric to Dec inward Macau with receipts gaming revenue (GGR) in the Chinese gambling casino enclave typically exceptional the December tally past 6%. Beynon sees 5% development this month, which could live a forerunner to decent first-quarter results for concessionaires.
Las Vegas Sands (NYSE: LVS) is the largest operator in that location with Phoebe cassino hotels piece Wynn Macau and MGM Communist China tally 2 structured resorts apiece. Recent information indicate all threesome operators gained market divvy up inwards 2023.
“Consensus at present calls for 1Q24E Macau Earnings Before Interest Taxes Depreciation and Amortization quarter-over-quarter to live as follows: LVS +9%, WYNN +2%, and MGM -4%,” added Beynon. “We wait 2024E GGR of -19% vs 2019 (+29% year-over-year), or ~US$29.5bn, with mass continuing to bleed above pre-pandemic levels.”
The analyst’s price targets on Sands and Wynn — the US-based companies to the highest degree levered to Macau — involve upside of 20% and 27%, respectively.
Less Bullish on Regional Casino Names
While the US consumer appears strong inward the face of mellow interest group rates and persistently elevated inflation, that strength isn’t additive crossways all gambling casino markets as highlighted by some modest signs of softness inwards select regional markets.
Of the octet “neutral” ratings Beynon assigns to gaming stocks in his coverage universe, quint are on regional gambling casino operators. That quintuplet includes Bally’s (NYSE: BALY), Boyd Gaming (NYSE: BYD), and Monarch Casino & Resort (NASDAQ: MCRI).
“January was hard granted abnormally turbulent weather condition inwards as many as tercet of IV weekends inwards some regions. All told, Jan results (the to the lowest degree of import month of the year) experient a -6% GGR. At this time, we stick with our 1Q US Regional estimation of -1% (-1 to -2% SS), piece stream cons calls for a 4% YoY EBITDA decline,” concluded the analyst.
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