{"id":320387,"date":"2024-05-20T14:34:52","date_gmt":"2024-05-20T19:34:52","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=320387"},"modified":"2024-05-20T15:44:47","modified_gmt":"2024-05-20T20:44:47","slug":"macau-casino-stocks-could-best-las-vegas-peers-says-cfra","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/macau-casino-stocks-could-best-las-vegas-peers-says-cfra\/","title":{"rendered":"Macau Casino Stocks Could Outperform Las Vegas Rivals, Says Analyst"},"content":{"rendered":"

With Las Vegas lacking catalysts and Macau having more room to run back to pre-coronavirus visitation levels, shares of casino operators with exposure to the Chinese territory could outperform Sin City-focused counterparts over the next year.<\/p>\n

\"Macau
A sign for Wynn Macau. An analyst is bullish on Macau casino stocks, saying those names could outperform Las Vegas rivals. (Image: Reuters<\/em>)<\/figcaption><\/figure>\n

That\u2019s the take of CFRA Research analyst Zachary Warring who, in a recent note, highlighted a preference for Macau gaming stocks over domestic equivalents. Rebounding visitation to the special administrative region (SAR) is a primary reason why Macau casino stocks could outpace Las Vegas rivals in the year ahead.<\/p>\n

For reference, Macau saw just 389,390 visitors in December 2022. Visitation to Macau for all of 2023 was up a whopping 395% Y\/Y, but was still only 71.6% of 2019 levels,\u201d wrote Warring. \u201cWe believe 2024 has plenty of upside in visitation and expect visitation to reach 2019 levels in Q4. Visitation for the first three months of 2024 trended between 80% and 95% of 2019 levels and continues to trend in the right direction.\u201d<\/p><\/blockquote>\n

As a point of reference, annual visits to the Asian casino center trended higher in the decade ending 2019, peaking at 39.40 million in that year, but in 2023, that number was 28.21 million. That implies there\u2019s still a long runway for Macau operators to get back to pre-pandemic norms and, if that goal is achieved, Macau gaming equities could benefit<\/a>.<\/p>\n

Among Macau Casino Stocks, CFRA Likes US-Based Names<\/h2>\n

In his report, Warring extolled a preference for the three Las Vegas-based Macau concessionaires — Las Vegas Sands (NYSE: LVS), MGM Resorts International (NYSE: MGM), and Wynn Resorts (NASDAQ: WYNN) — maintaining \u201cbuy\u201d ratings on the trio.<\/p>\n

\n

LVS, which recently celebrated the 20th<\/sup> anniversary of Sands Macau, is the largest Macau operator with five integrated resorts there. Sands\u2019 leverage to premium-mass and mass-market bettors<\/a>, as well as its expansive portfolio of nongaming amenities, are advantages in the SAR.<\/p>\n<\/div>\n

Warring also highlighted the operator\u2019s efforts to firm its balance sheet and pursuit of a New York City casino license as potential sparks for the shares.<\/p>\n

\u201cThe company has $4 billion in debt coming due in 2024 and 2025, which we believe management will pay off instead of refinance, improving its balance sheet and boosting EPS. LVS is competing for licensing in New York City, which would be the company\u2019s only U.S. property after the sale of its Las Vegas properties in 2022,\u201d added the analyst. \u201cWe believe LVS will generate significant free cash flow and improve its balance sheet in 2024. We expect a positive 12 months from LVS.\u201d<\/p>\n

CFRA Less Enthusiastic on Las Vegas<\/h2>\n

Clark County officials estimate the combined economic impact of last November\u2019s Las Vegas Grand Prix and the Super Bowl in February at $2.1 billion \u2013 an impressive sum, but one that\u2019s already factored into shares of Strip operators.<\/p>\n

\u201cIn our opinion, the growth seen in Vegas over the past six months has come from these two huge events, which are now in the rearview with little to drive growth moving forward,\u201d observed Warring.<\/p>\n

\n

The race returns this November, but it is possible initial hype that drove room rates higher won\u2019t repeat. That could weigh on MGM, which is the largest Strip operator, but the company can augment that potential softness via its stake in MGM China. Rival Caesars Entertainment<\/a> (NASDAQ: CZR) has no Macau exposure, meaning its share price is largely reflective of investors\u2019 feelings about Las Vegas and regional casinos and online gaming.<\/p>\n<\/div>\n

Warring noted Caesars\u2019 substantial debt burden could signal a value trap, but added the operator could sell some lagging assets this year to reduce those obligations.<\/p>\n

\u201cWe expect CZR to sell underperforming assets in 2024 to raise cash and pay down its elevated debt load,\u201d concluded the analyst. \u201cWe see limited upside to revenues and earnings before interest, taxes, depreciation, and amortization (EBITDA) from its Las Vegas and Regional segments from these levels and the company plans to cut back on marketing at digital, which should see a growth deceleration as well. We believe CZR\u2019s forward enterprise value\/EBITDA multiple could be a value trap.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

With Las Vegas lacking catalysts and Macau having more room to run back to pre-coronavirus visitation levels, shares of casino operators with exposure to the Chinese territory could outperform Sin City-focused counterparts over the next year. That\u2019s the take of CFRA Research analyst Zachary Warring who, in a recent note, highlighted a preference for Macau […]<\/p>\n","protected":false},"author":46,"featured_media":291011,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[69069,10,81886],"tags":[81913,81903,23],"acf":[],"yoast_head":"\nMacau Casino Stocks Could Best Las Vegas Peers, Says CFRA<\/title>\n<meta name=\"description\" content=\"Macau Casino Stocks Could Outperform Las Vegas Rivals, Says Analyst.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/macau-casino-stocks-could-best-las-vegas-peers-says-cfra\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Macau Casino Stocks Could Best Las Vegas Peers, Says CFRA\" \/>\n<meta property=\"og:description\" content=\"Macau Casino Stocks Could Outperform Las Vegas Rivals, Says Analyst.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/macau-casino-stocks-could-best-las-vegas-peers-says-cfra\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2024-05-20T19:34:52+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-05-20T20:44:47+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/09\/FKF36AOPZZIF3OJ2LXMHTS7ECY.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/macau-casino-stocks-could-best-las-vegas-peers-says-cfra\/\",\"url\":\"https:\/\/www.casino.org\/news\/macau-casino-stocks-could-best-las-vegas-peers-says-cfra\/\",\"name\":\"Macau Casino Stocks Could Best Las Vegas Peers, Says CFRA\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/macau-casino-stocks-could-best-las-vegas-peers-says-cfra\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/macau-casino-stocks-could-best-las-vegas-peers-says-cfra\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/09\/FKF36AOPZZIF3OJ2LXMHTS7ECY.jpg\",\"datePublished\":\"2024-05-20T19:34:52+00:00\",\"dateModified\":\"2024-05-20T20:44:47+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Macau Casino Stocks Could Outperform Las Vegas Rivals, Says Analyst.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/macau-casino-stocks-could-best-las-vegas-peers-says-cfra\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/macau-casino-stocks-could-best-las-vegas-peers-says-cfra\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/macau-casino-stocks-could-best-las-vegas-peers-says-cfra\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/09\/FKF36AOPZZIF3OJ2LXMHTS7ECY.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/09\/FKF36AOPZZIF3OJ2LXMHTS7ECY.jpg\",\"width\":1200,\"height\":800,\"caption\":\"A sign for Wynn Macau. 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