J.P. Morgan Sees Continued Upside In The Macau SAR-Centric Equities
- J.P. Morgan analyst Joseph Greff provides insight on the outlook for gaming and lodging stocks/companies in the fiscal year 2023.
- The analyst sees more compelling value and better risk-rewards in gaming versus lodging, given better values and differing sets of investors’ expectations for fundamentals.
- Also, the analyst adds that the gaming stocks reflect lower than average valuations, reflecting investor concerns over the sustainability of presently strong spend per visit and material pandemic-related margin gains.
- Meanwhile, larger lodging corporations like Marriott International Inc (NASDAQ: MAR) and Hilton Hotels Corporation (NYSE: HLT) possess above-average valuations versus history, reflecting a higher set of investor expectations.
- The analyst sees continued upside in the Macau SAR-centric equities, Las Vegas Sands Corp (NYSE: LVS), Wynn Resorts Limited (NASDAQ: WYNN), Melco Resorts & Entertainment Ltd (NASDAQ: MLCO).
- Also Read: Macau Casino Stocks Rally Following License Renewal Set To Begin On Jan. 1, 2023
- In gaming, the analyst also likes LV Strip-centric operators, MGM Resorts International (NYSE: MGM) and Caesars Entertainment Inc (NASDAQ: CZR), given attractive valuations and a solid backdrop for the market.
- Related: MGM Resorts Analyst Turns Bullish, Upgrades Casino Stock Despite Challenging 2023
- Within lodging, the analyst lists Wyndham Hotels & Resorts Inc (NYSE: WH) and Hyatt Hotels Corporation (NYSE: H) as relative outperformers.
- U.S. gaming stocks, up until market-wide moves off the bottom in late September and October, have sizably underperformed the S&P 500. It is due to investor concerns that well-above pre-pandemic casino spend per trip and significant pandemic margins gains may not be sustainable given a negative macro backdrop.
- On the other hand, Macau, until very recently, had been abandoned by investors and has massively underperformed the rest of the analyst’s coverage universe since the pandemic’s bottom in 2020.
- Greff thinks recent policy moves and commentary would suggest China and Macau will gradually improve travel/mobility, setting up a recovery in the 2Q23.
- When RevPAR growth accelerates, lodging stocks tend to outperform, says the analyst. looks at lodging as having really attractive growth through the 1Q23.
- Also See: Meta Platforms, This Biotech ETF And These China Plays Are CNBC's 'Final Trades'
- Price Action: WH shares are trading lower by 0.07% at $71.28 on the last check Thursday.
- Photo Via Company
Latest Ratings for LVS
| Date | Firm | Action | From | To |
|---|---|---|---|---|
| Jan 2022 | CBRE | Maintains | Hold | |
| Jan 2022 | Deutsche Bank | Maintains | Buy | |
| Jan 2022 | UBS | Upgrades | Neutral | Buy |
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