Stocks in the gambling industry seem to be looking up with major companies gaining value, possibly buoyed by the announcement of positive Macau revenue trends for early June.
Meanwhile, Caesars Entertainment Corp. CZR was granted a reprieve by a U.S. bankruptcy judge pertaining to few bondholders’ lawsuits. Additionally, MGM Resorts International MGM announced an increase in its previously issued profit growth plan target on its Analyst and Investor day.
In a separate development, Isle of Capri Casinos, Inc. ISLE reported fourth quarter and fiscal 2016 results. The company reported mixed results with the bottom line beating the Zacks Consensus Estimate and the top line lagging.
Recap of the Week’s Most Important Stories
1. Share price of leading casino operators rallied last week, after several brokerages reportedly cited that Macau’s gaming industry posted a positive year-on-year performance in the first 12 days of June. In fact, Telsey Advisory Group estimates gross gaming revenues (GGR) in Macau for the month of June to be up roughly 5% year over year.
Consequently, share price of casino companies, Wynn Resorts Ltd. WYNN, MGM Resorts, Melco Crown Entertainment Limited MPEL and Las Vegas Sands Corp. LVS rose, as Macau is a key operating region for these companies.
Company |
Last Week |
Last 6 Months |
WYNN |
3.0% |
62.8% |
LVS |
2.1% |
13.1% |
MGM |
2.0% |
16.3% |
MPEL |
4.6% |
-13.4% |
CACQ |
0.7% |
48.0% |
BYD |
1.2% |
-0.05% |
CZR |
6.2% |
13.0% |
Over the last five trading sessions, share price movement of the major stocks was quite encouraging, with all the companies witnessing positive movement. Caesars gained the highest at 6.2% followed by Melco Crown’s 4.6% increase.
Similarly, over the last six months, the price performance of most of the key gambling stocks was positive. Among the stocks that appreciated the most were Wynn Resorts and Caesars Acquisition Co. CACQ, witnessing an increase of nearly 62.8% and 48.0%, respectively. On the contrary, Melco Crown and Boyd Gaming Corp. BYD recorded a decline over the last six months.
What’s Next in the World of Gambling?
We note that gambling stocks have raked in gains in recent sessions. However, a majority of investment analysts expect Macau’s full-month GGR for June to be in the negative territory, on a year-on-year basis. Thus, the industry’s ability to sustain the positive momentum is in question.
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