Analyst Karl Choi of Bank of America Securities reiterated a Hold rating on Melco Resorts & Entertainment, reducing the price target to $9.00.
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Karl Choi has given his Hold rating due to a combination of factors affecting Melco Resorts & Entertainment. The company’s stock price has recently declined, influenced by weaker-than-expected gross gaming revenue in October, ongoing global trade tensions, and increased promotional spending by competitors, which could pressure Melco’s margins. Despite these challenges, Melco’s valuation appears fair, trading at 7.7 times its estimated 2026 EBITDA, supported by strong free cash flow projections. However, the lack of near-term dividends, as the company focuses on debt repayment, adds to the cautious outlook.
In addition, while Melco’s third-quarter property EBITDA is expected to grow year-over-year, it is anticipated to decline sequentially. The company’s market share in Macau has slightly decreased, partly due to intensified competition and less favorable luck. The recent closure of some properties and the initial losses from a new project in Sri Lanka also contribute to a cautious stance. Consequently, cash earnings estimates have been trimmed, and the price objective has been lowered, reflecting adjustments in earnings projections and valuation metrics.
According to TipRanks, Choi is ranked #5570 out of 10036 analysts.
In another report released on October 9, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $8.00 price target.