Macau gaming stocks’ 25 percent year-to-date correction has not created a compelling entry point, JP Morgan said, warning that weak revenue trends and likely earnings downgrades could keep pressure on the sector in the near term.
The brokerage said the sector had underperformed the Hang Seng Index, which was down about 5 percent over the same period, but maintained a selective stance. Second-quarter results are likely to trigger further cuts to market forecasts and broadly cautious management commentary, it added.
JP Morgan sees a more attractive setup emerging in September as comparison bases ease and potential catalysts become clearer. Galaxy Entertainment remains its top pick, supported by possible higher interim dividends and longer-term optionality from Phase 4, which is expected to open next year.
The cautious view was echoed by UBS, which expects negative sentiment to persist through July as the FIFA World Cup and uncertainty over mainland outbound investment policy continue to weigh on demand. UBS said the sector was trading at 8.3 times forecast 2026 enterprise value to EBITDA, around 0.7 standard deviations below its average since 2023, but still named Melco Resorts & Entertainment as its preferred stock.
Macau GGR reached an estimated MOP7.3 billion ($904 million) in the first 12 days of July, equivalent to MOP608 million ($75.2 million) per day, according to JP Morgan. The latest seven-day run rate improved to MOP621 million ($76.9 million), although the brokerage said the rise was helped by favorable VIP luck rather than a meaningful recovery in underlying demand.
UBS estimated mass-market daily revenue was down 2 to 4 percent month on month, while VIP volume fell as much as 3 percent. It said consensus expectations for a July daily run rate of MOP671 million remained too optimistic.
