Macau GGR Up 19% Week-over-Week, Sterne Agee CRT Highlights (LVS) (MGM) (MPEL) (WYNN)
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In a Macau update that could be viewed as encouraging for casino stocks including Las Vegas Sands (NYSE: LVS), MGM Resorts (NYSE: MGM), Melco Crown (NASDAQ: MPEL), and Wynn Resorts Ltd (NASDAQ: WYNN), Sterne Agee CRT analyst David Bain notes improvement for Macau in week two of June. He notes that GGR, while down sharply year-over-year, was up 19% week-over-week.
"According to our channel checks, Macau table-only gross gaming revenue (“GGR”) is MOP7.4 billion (USD$930m) from June 1 to June 14. Including slot assumptions, the June GGR run rate indicates a -39% year-over-year (“YoY”) monthly result, or MOP16.5b (USD$2.1b). Our June GGR growth forecast range of between -33% and -38% YoY remains unchanged."
Meanwhile, GGR was +19% week-over-week. "Recall week one of June was negatively impacted by hold and checks also cite the impact from China’s National Higher Educational Entrance Exam held late last week (9.4m take the exam, and parents choose to stay close to home during this time). However, deMaspite aggravating factors, week one GGR results were disappointing given a two week proximity to the opening of Galaxy’s Phase 2 and as such, last week’s GGR result is welcome news."
Still the analyst sees 2Q15 downward revisions to come. "We believe 2Q15 Macau property EBITDA consensus is ~4% to ~12% too high, depending on the operator," he said. "Our view is based on checks to date and the assumption that June GGR ends at -35% YoY without significant market share inflections."
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