Melco Resorts & Entertainment outperformed expectations in the first quarter of 2026, with analysts pointing to market share gains in Macau and stronger-than-expected performance in the Philippines as key drivers, according to an investment memo by Seaport Research.
Seaport senior analyst Vitaly Umansky said the company delivered a ‘solid beat,’ with property EBITDA exceeding both consensus and the firm’s own estimates, supported primarily by contributions from Macau operations and City of Dreams Manila.
In Macau, Melco’s market share reached approximately 15.2 percent, representing an increase of more than 110 basis points quarter-on-quarter. The gain was attributed to improved utilization of electronic gaming machine inventory and targeted player acquisition strategies, the report noted.
Umansky added that EBITDA upside in the quarter was ‘largely from Studio City and the Philippines,’ highlighting the relative strength of those segments.
City of Dreams Manila exceeded expectations, with property EBITDA rising 24.4 percent year-on-year and 13.1 percent quarter-on-quarter. The improvement was supported by strong VIP performance, with volumes increasing by more than 30 percent year-on-year and gross gaming revenue from VIP play rising sharply on higher hold. The analyst noted, however, that the Philippines business may face further headwinds in the second quarter stemming from inflation driven by the conflict in the Middle East, and that new competition in Manila continues to weigh on the operation.
Despite the strong quarter, the report highlighted a competitive environment in Macau, with rising player reinvestment indicating continued pressure on margins. While management expects conditions to stabilize, Seaport said it does not anticipate a meaningful easing of competition in the near term.
For the second quarter, the analyst expects potential headwinds in the Philippines linked to rising energy costs, alongside ongoing geopolitical impacts on Cyprus operations. Seaport maintained its ‘Buy’ rating on Melco, citing what it described as an ‘undemanding’ valuation and a favorable risk-reward profile.
