- Nomura has an eye-popping note out on the Macau sector after pushing pencil to paper.
- After the firm applied a very conservative 2019 Macau gross gaming revenue forecast of -3%, consisting of a 10% VIP segment drop and mass market increase of 3%, its model still showed share price gains across U.S.-listed casino names on the assumption that sentiment over a disaster scenario will fade. Harry Curtis and team see 2019 returns (including dividends) of 35% for MGM Resorts (NYSE:MGM), 27% for Melco Resorts and Entertainment (NASDAQ:MLCO), 17% for Wynn Resorts (NASDAQ:WYNN) and 13% for Las Vegas Sands (NYSE:LVS).
- What if Macau surprises with a +3% GGR tally for 2019? Nomura's model spits out returns of +39% for MGM, +47% for Melco, +31% for Wynn and +15% for Las Vegas Sands.
- It's not just Nomura: Bernstein got into the business of covering Macaus stocks this week, initiating coverage on Wynn Resorts and Las Vegas Sands at Outperform. Bernstein analysts call the Macau sector "too cheap to ignore" as a whole and call out Wnnn (+56%) and Las Vegas Sands (+22%) for big gains over the next year.
- Related ETF: BJK.
- Now read: EAA Announces November 2018 Portfolio
Original article