After what has been an uneventful year for Macau casino stocks in 2024 and December specifically, when their gross gaming revenue (GGR) reports were subpar at best, investors may initially be wary about investing in them at the beginning of 2025. Yet one industry analyst is anticipating significant potential gains for them this coming year.
Stifel analyst Steven Wiecyznski recently expressed confidence to clients of Stifel that the market had already factored in China’s current macroeconomic concerns, suggesting that Macau could experience an upswing this year within its gaming sector.
“For 2025, Macau-focused stocks are especially intriguing. Not only have they fallen behind our coverage universe in 2024 and since the pandemic broke out; macro concerns related to China often dissuade investors from revisiting this sector,” Wieczynski noted. However, his valuation suggests the market may already have adequately factored in these pressures from China as well as any implications from a Trump presidency.
On Tuesday, data revealed by Macau operators revealed a 24% growth year-on-year in their gross gaming revenues (GGR).
Wynn Poised to Lead Among Macau Casino Stocks in 2025
Las Vegas Sands and Wynn Resorts were two U.S.-listed Macau operators that experienced uneven fortune in 2018. Las Vegas Sands saw a small gain of almost 4% while Wynn experienced more than 5% losses; although Wynn Macau saw less of its clientele affected by economic fluctuations compared to Sands China which relies heavily on mass market segment revenues for revenue generation. Wieczynski anticipates Wynn Resorts will experience a potential rebound this year with potential outperforming Sands by being less dependent upon mass market segment revenues than Sands China which relies upon mass market segment revenues for revenue generation than Wynn Macau does for Wynn Macau is likely outperforming Sands China due to being less reliant upon mass market segment revenues versus Sands China which relies significantly upon mass market segment revenues than Wynn Macau clientele is affected by economic fluctuations than Sands has in China due to having less influence by economic fluctuations impact than Sands China which relies significantly upon mass market segment revenues to generate mass market segment segmentation; unlike Sands China relies heavily upon mass market segmented clientele revenue streams; which makes their respective brands; hence potential successor companies to follow them this year ahead.
“Wynn Resort’s focus on premium mass market exposure may make it less vulnerable to macroeconomic headwinds compared to Las Vegas Sands, which relies more heavily on general mass market visitation,” Wiecyznski explained. He acknowledged the possible negative ramifications from an economically weaker Chinese economy on Macau visitation or spending levels, yet believes market expectations for an adverse scenario has already exceeded reality.
Wieczynski noted that Wynn could present investors with compelling investment prospects given its growth beyond Macau, alongside other Macau casino stocks, due to an attractive risk/reward profile in 2025.
Potential for GGR Growth to Boost Macau Casino Stocks
Macau gaming stocks suffered disappointing returns despite an upsurge in gaming revenue during 2024, further emphasizing their correlation. Macau had achieved 80.07% of its pre-pandemic GGR levels during that year – offering room for additional expansion into 2025.
Investors should focus on the recovery and growth prospects for 2025 as a whole; consensus estimates may prove conservative,” Wieczynski advised investors. While pinpointing exact figures remains challenging due to external influences, initial predictions call for year-over-year accelerations between 7-9 % in Q1 2025 followed by 8-12% accelerations by Q2. We anticipate an annualized GGR growth range between 4- 10% over 2024.”
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