U.S. Casinos With Presence in Macau Trade Mixed After Weak Data

Macau reports that gambling revenue plummeted 90% in September from a year earlier.
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U.S. casino companies with operations in Macau traded mixed Thursday after Macau’s Gaming Inspection and Coordination Bureau reported that gambling revenue plummeted 90% in September from a year earlier.

The September revenue totaled 2.21 billion patacas, the Macau currency. That translates to HK$2.15 billion, which in turn translates to $277 million. Revenue in Macau soared 66% from August. 

Gambling activity has dive-bombed across the world amid the coronavirus pandemic that has kept potential casino visitors at home.

As for the U.S. companies with casinos in Macau, Las Vegas Sands  (LVS) - Get Report recently traded at $46.16, down 1.07% - the stock has declined 33% year to date. Wynn Resorts  (WYNN) - Get Report traded at $71.25, down 0.78%, and has dropped 49% year to date. MGM Resorts  (MGM) - Get Report traded at $21.78, up 0.16%, and has slid 34% so far this year.

Morningstar analyst Dan Wasiolek likes Las Vegas Sands' activity in Macau.

“We view the company as well positioned for long-term growth in the gaming industry because of the attractive long-term growth opportunity of Macau (59% of 2019 EBITDA) and Sands' dominant mass and non-gaming position on the attractive Cotai Strip,” he wrote in a July report.

He put fair value at $60 for the stock.

Wasiolek also likes Wynn’s presence in Macau.

“We view Wynn Resorts as a high-end iconic brand that is well positioned to participate in the attractive long-term growth opportunity of Macau (76% of 2019 EBITDA), as it has expanded its room share in the region through the August 2016 opening of the Palace in the popular Cotai region,” he wrote in an August report.

He put fair value for the stock at $110.

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