US-based research firm Morningstar has lowered its financial forecasts for SJM Holdings for the 2026–2029 period, saying the Macau casino operator’s return to stable profitability will take longer than previously expected following the closure of satellite casinos and ongoing operational pressures.
Morningstar senior equity analyst Jennifer Song said the firm has reduced its revenue projections for SJM by between 1 percent and 3 percent for 2026 through 2029, while cutting adjusted EBITDA estimates by 4 percent to 9 percent. The revisions reflect a ‘longer transition period’ after the end of Macau’s satellite casino model, as well as increased spending required to rebuild market share and profitability.
Morningstar said SJM’s fourth-quarter results were weaker than expected, with gross gaming revenue declining 7 percent quarter-on-quarter and adjusted EBITDA falling 24 percent, narrowing the adjusted EBITDA margin to 10.3 percent. The decline was attributed to disruptions linked to the phased closure of satellite casinos, lower VIP win rates and elevated operating costs.
‘With all satellite casinos now closed, we believe SJM is on the path to restoring profitability. However, the near-term outlook remains subdued, as the successful redeployment of gaming assets may take time,’ Song wrote in the report.
The analyst also noted that momentum at the company’s Cotai flagship, Grand Lisboa Palace, remains weak, with adjusted EBITDA turning negative and market share slipping slightly. Meanwhile, SJM’s balance sheet remains stretched, with net debt totaling around HK$24 billion ($3.08 billion) as of the end of 2025.
Morningstar expects deleveraging to remain a key priority for the company and forecasts that dividend payments are unlikely to resume until 2027.
Despite the near-term challenges, the research firm said the closure of satellite casinos could ultimately redirect customer traffic toward SJM’s self-promoted properties, potentially supporting longer-term growth once operational adjustments are completed.
