While there have been some whispers on growth resuming in Macau this year, Vitaly Umansky of Bernstein has been the first to shout it, upgrading casino stocks and calling 2016 the year of returned mass growth.
Umansky now rates all Macau operators as outperform, having upgraded Galaxy, MGM China and Wynn Macau from market perform. While he did lower targets on the companies given expected near-term gaming revenue volatility, overall their stocks have been oversold and strong growth drivers this year that outweigh potential risks in the long run, Umansky said.
Valuations have become attractive with expected mass-market and non-gaming revenue growth and margins should stabilise, Umansky said. In the long term, pent-up gaming demand from China will overcome currency devaluation and the government’s anti-corruption campaign, Umansky said.
Source: Fantini’s Gaming Report
