American investment bank JPMorgan Chase and Company has reportedly given the coronavirus-hit casino market of Macau a big boost by promoting the value of shares in a trio of its most prominent operators.
According to a Wednesday report from Inside Asian Gaming, the New York-headquartered enterprise upgraded the stocks in MGM China Holdings Limited, Wynn Macau Limited and Sands China Limited from ‘neutral’ to ‘overweight’ while simultaneously describing the casino market in the former Portuguese enclave as ‘incrementally bullish.’ The source detailed that this positive news comes as Macau’s operators are continuing to feel the adverse effects of the coronavirus pandemic with their individual share prices often standing at around 60% lower than where they were just a year ago.
Lingering lull:
Macau is home to some of the world’s largest and most prestigious casinos including the iconic Casino Grand Lisboa venue from SJM Holdings Limited as well as Melco Resorts and Entertainment Limited’s 1,600-room Studio City Macau development. However, the city saw its aggregated gross gaming revenues for the whole of 2021 drop by over 70% when compared with the pre-pandemic 2019 to around $10.82 billion owing largely to a range of coronavirus-related public health and travel restrictions.
Future forecast:
Nevertheless, JPMorgan Chase and Company analysts Amanda Cheng, Livy Lyu and DS Kim reportedly used an official filing to proclaim that the casino market in Macau is now ‘skewed to the upside’ even as sentiment among investors remains ‘as apathetic as at any time since’ these operators began listing approximately ten years ago. The trio moreover purportedly disclosed that every one of the enclave’s six casino concessionaires should soon begin to see an ‘upside’ including an about 27% swell for Wynn Macau Limited, which runs the 1,000-room Wynn Macau as well as the even larger Wynn Palace Cotai properties, from in the region of $0.82.
Nearing nadir:
Finally, the JPMorgan Chase and Company trio reportedly furthermore argued that the value of shares in MGM China Holdings Limited, Wynn Macau Limited and Sands China Limited have not sunk much lower since their initial plunge at the hands of the coronavirus pandemic, which suggests that their depressed prices have already hit rock bottom and factored in pending uncertainties including those concerning licensing and the VIP sector.
Reportedly read the filing from the JPMorgan Chase and Company analysts…
“We have turned incrementally bullish on Macau gaming. Most investors seem hesitant to bottom-finish, citing license risks, VIP fallout and uncertain travel policies as key concerns. These are all valid but we think the level of concern is unnecessarily high.”