\u201cBased on commentary from government officials in Macau, Hong Kong, and China, we may not see a complete reopening until mid-2022, making a full recovery in FY22 difficult to achieve,\u201d said DeCree.<\/p>\n
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Given the sluggish pace of vaccinations and VIP spending, the 13.5x 2022 EBITDA multiple currently sported by Macau stocks appears rich. By historical standards, it is because the five-year forward EBITDA average is 12x.<\/p>\n<\/div>\n
\u201cUncertainty surrounding Macao’s recovery trajectory remains elevated. Sustained recovery in 2021 and beyond will hinge on steady progress in virus containment, effective vaccine distribution, and China’s evolving policies towards cross-border travel and gaming,\u201d adds Fitch.<\/p>\n
Individual Ideas<\/h2>\n
There are six Macau concessionaires, and neither of the two DeCree recommends to investors are US-based companies.<\/p>\n
The analyst prefers Galaxy Entertainment and Melco Resorts & Entertainment (NASDAQ:MLCO), noting the latter is attractively valued relative to its peer group, while Galaxy \u201crepresents one of the most compelling long-term growth plays in all of Asian gaming, and both companies come with less perceived concession renewal risk.\u201d<\/p>\n
The US-based Macau operators are Las Vegas Sands (NYSE:LVS), MGM Resorts International (NYSE:MGM), and Wynn Resorts (NASDAQ:WYNN).<\/p>\n","protected":false},"excerpt":{"rendered":"
In Macau, gross gaming revenue (GGR) and visitation trends are showing modest signs of improvement. But those upticks may not be enough to be enough to support near-term upside in shares of concessionaires. That’s the view of Union Gaming analyst John DeCree, who argues that consensus forecasts for 2022 earnings before interest, taxation, depreciation and […]<\/p>\n","protected":false},"author":46,"featured_media":171190,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[69069,10],"tags":[],"acf":[],"yoast_head":"\n
Macau GGR, EBITDA Recovery Doesn't Warrant High Stock Valuations<\/title>\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\t\n\n\n\n\n\n\t\n\t\n\t\n