Macau Gaming Revenue Dips Amidst World Cup, Affecting Sands and Wynn Price Targets

Macau’s gross gaming revenue (GGR) experienced a notable downturn in June, with a 12% year-over-year decrease and an 18% drop from the previous month. This slump has prompted Macquarie analyst Chad Beynon to modestly reduce the price targets for major casino operators Las Vegas Sands (LVS) and Wynn Resorts (WYNN).

While overall visitation to the Chinese gaming hub remained robust, surpassing 20 million visits for the year ahead of schedule, this influx of players did not translate into higher revenue. June’s figures effectively erased any gains made in the second quarter, as April saw a 5.5% year-over-year increase and May a 6.7% rise.

Por que importa

The World Cup has been identified as a contributing factor to the sluggish performance, although June is also seasonally a weaker month for Macau’s gaming market. Analysts anticipate a rebound in demand following the tournament’s conclusion but are adjusting near-term GGR forecasts downward.

Las Vegas Sands, which operates five casino hotels in Macau through its Sands China subsidiary, is particularly sensitive to GGR fluctuations in the region. Beynon lowered his price target for the operator of The Venetian Macau to $66 from $68, while maintaining an “outperform” rating. He cited the company’s strong position, benefits from global wealth trends, and reasonable valuation, also highlighting the profitability of Marina Bay Sands in Singapore and its expansion plans.

Contexto

Wynn Resorts, with two Macau casino resorts, also derives a significant portion of its revenue and EBITDA from the special administrative region. Despite the challenging June figures, Beynon kept his “outperform” rating on Wynn but slightly adjusted its price target to $143 from $145. The analyst pointed to several structural tailwinds for Wynn, including growth driven by premium mass market in Macau, continued outperformance in Las Vegas supported by luxury pricing power, the upcoming Wynn Al Marjan Island in the UAE, and a capital-friendly strategy.

Key facts:
| Company | June GGR Change | Analyst Price Target | Rating |
|——————-|—————–|———————-|————|
| Las Vegas Sands | -12% YoY | $66 (from $68) | Outperform |
| Wynn Resorts | -12% YoY | $143 (from $145) | Outperform |

The performance of Macau’s gaming market directly impacts the financial outlook for major operators like Las Vegas Sands and Wynn Resorts. Investors and industry observers will be closely monitoring the second half of the year for signs of acceleration in GGR, particularly as the influence of major sporting events like the World Cup wanes. The resilience of premium mass market segments and the success of upcoming international projects will be critical factors in the continued performance of these companies.

Source: Casino.org News – Sands, Wynn Price Targets Cut on Sluggish Macau GGR (https://www.casino.org/news/sands-wynn-price-targets-cut-on-sluggish-macau-ggr/)

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