While in many places, casino goers are making some kind of return to the tables—even if it is a minor one—the same could not be said in Macau for a while. With the Chinese government well into its economy-killing Zero-COVID stance, it looked like only a matter of time for casino stocks in the region. However, China recently pivoted, and the return to Macau gaming is starting to take shape.
The latest word out of the Macau casino market noted a gross revenue of just under $2 billion. That’s up a whopping 366% against the same time a year prior and a new high not seen since 2020. The gross gaming revenue results from May alone were up 5.7% against April’s, showing that the comeback has legs and is improving month-to-month, not just against the low-hanging fruit of year-to-year performance.
However, as amazing as that 366% hike is, it turns out that it was slightly below expectations. Edward Engle, with Roth MKM, noted that a surprise resurgence in COVID-19 case numbers contributed to a bit of a slowdown in the gains. This should be expected, however, not celebrated, notes Louis Tse Ming-Kwong of Wealthy Securities. Tse Ming-Kwong notes that the comparisons between this year and last will be amazing, thanks to how bad last year was. However, the medium-term comparisons will have to get some kind of extra effort, including widened bases and outright encouragement from the central government.
A look at some of the biggest names in the casino space demonstrates what’s going on in today’s action. Wynn Resorts (NASDAQ:WYNN) lost fractionally but still offers a healthy 27.4% upside potential, thanks to its average price target of $125.41. It also comes with a Moderate Buy rating from analysts. Meanwhile, one of today’s biggest gainers, Melco Resorts (NASDAQ:MLCO) boasts 46.17% upside potential on an average price target of $16.43.
