Texas Capital Sees Upside for Melco Resorts & Entertainment
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy MLCO?
Source: seekingalpha
- Cash Flow and Capital Structure: Analyst David Bain highlighted that Melco Resorts & Entertainment's (MLCO) free cash flow and capital structure provide unique corporate optionality, with the parent company able to purchase MLCO's float at a 56% premium to Friday's closing price, utilizing one turn of leverage for capital operations.
- Dividend Yield Potential: Bain noted that half of Melco's future net free cash flow could be allocated to create a ~9% dividend yield, while the other half would go toward debt repayment, thereby enhancing the company's financial stability and attractiveness to investors.
- Share Repurchase Plans: Melco could also opt to initiate an accelerated share repurchase program or aggressively buy back shares under its $710 million buyback authorization, which would further boost earnings per share and enhance shareholder value.
- Buy Rating and Price Target: Texas Capital maintains a Buy rating on Melco Resorts with a price target of $11.50, representing over 100% upside from current trading levels, despite the stock being down more than 27% year-to-date.
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Analyst Views on MLCO
Wall Street analysts forecast MLCO stock price to rise
4 Analyst Rating
3 Buy
1 Hold
0 Sell
Strong Buy
Current: 5.600
Low
9.50
Averages
11.21
High
12.55
Current: 5.600
Low
9.50
Averages
11.21
High
12.55
About MLCO
Melco Resorts & Entertainment Ltd is an investment holding company principally engaged in the development and operation of resort facilities. The Company is mainly involved in the provision of casinos, hotel rooms, food and beverage, as well as entertainment, retail and other services. The Company operates casinos under the names of City of Dreams, Studio City, Altira Macau, City of Dreams Manila, City of Dreams Mediterranean and others. The Company also operates electronic gaming machines through Mocha Clubs. In addition, the Company offers hotel management services. The Company operates its business in Asia and Europe.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Texas Capital Sees Upside for Melco Resorts & Entertainment
- Cash Flow and Capital Structure: Analyst David Bain highlighted that Melco Resorts & Entertainment's (MLCO) free cash flow and capital structure provide unique corporate optionality, with the parent company able to purchase MLCO's float at a 56% premium to Friday's closing price, utilizing one turn of leverage for capital operations.
- Dividend Yield Potential: Bain noted that half of Melco's future net free cash flow could be allocated to create a ~9% dividend yield, while the other half would go toward debt repayment, thereby enhancing the company's financial stability and attractiveness to investors.
- Share Repurchase Plans: Melco could also opt to initiate an accelerated share repurchase program or aggressively buy back shares under its $710 million buyback authorization, which would further boost earnings per share and enhance shareholder value.
- Buy Rating and Price Target: Texas Capital maintains a Buy rating on Melco Resorts with a price target of $11.50, representing over 100% upside from current trading levels, despite the stock being down more than 27% year-to-date.
See More
Melco Resorts Releases 2025 Sustainability Report
- Energy Efficiency Achievements: Melco Resorts has implemented energy efficiency measures that have resulted in annual savings of over 71.7 million kWh, equivalent to the electricity consumption of over 10,000 homes, significantly reducing operational costs while enhancing environmental accountability.
- Water Conservation: The company has achieved annual savings of over 290,000 m³ of water through effective management practices, which is equivalent to saving 116 Olympic-sized swimming pools, thereby strengthening its leadership position in sustainability.
- Community Engagement: Over 4,100 colleagues participated in 486 volunteering activities, showcasing the company's commitment to social responsibility, while delivering over 763,000 learning hours to enhance employee skills and promote professional growth.
- Supply Chain Sustainability: In 2025, 100% of bed and bath linens were sourced with OEKO-TEX® certification, ensuring product safety, while 80% of chemicals procured were rated green or amber, reflecting the company's proactive efforts in environmental stewardship.
See More
Macau's April Gaming Revenue Rises 5.5% Year-on-Year
- Revenue Growth: According to the Gaming Inspection and Coordination Bureau, Macau's gross gaming revenue (GGR) rose 5.5% year-on-year in April to 19.9 billion patacas ($2.46 billion), indicating signs of market recovery.
- Sequential Decline Analysis: Despite the year-on-year increase, April's revenue was down 12.6% from March, primarily due to the month being traditionally slow with no extended holidays to boost activity.
- Year-to-Date Performance: For the first four months of 2026, Macau's GGR is up 12.1% year-on-year to 85.8 billion patacas ($10.6 billion), yet still down 14.5% from pre-pandemic levels in 2019, highlighting the challenges in market recovery.
- Market Pressure Warning: Analyst Vitaly Umansky noted that the deceleration in revenue growth and increased margin pressure could lead casino operators to become more vigilant regarding expense fluctuations and player reinvestment as uncertainties loom ahead.
See More
Melco Resorts Q1 Earnings Beat Expectations
- Earnings Beat: Melco Resorts reported a Q1 GAAP EPS of $0.20, exceeding expectations by $0.08, indicating a strong rebound in profitability and reflecting its competitive edge in the Macau market.
- Significant Revenue Growth: The company achieved revenues of $1.37 billion in Q1, an 11.4% year-over-year increase, surpassing expectations by $40 million, demonstrating positive progress in the recovery of tourism and gaming operations, which solidifies its market position.
- Optimistic Market Outlook: As the Macau market recovers, Melco Resorts is recognized as a standout in the casino sector, with analysts expressing optimism about its future growth potential, likely attracting more investor interest.
- Upcoming Catalysts: The company is viewed as undervalued, with several catalysts on the horizon that could drive stock price increases, including sustained market demand and potential rating upgrades, further boosting investor confidence.
See More
Melco Resorts Q1 Earnings Announcement Scheduled
- Earnings Release Date: Melco Resorts & Entertainment (MLCO) is set to announce its Q1 earnings on April 29 before market open, with consensus EPS estimate at $0.09 and revenue forecast at $1.33 billion, reflecting an 8.1% year-over-year growth.
- Performance Beat Record: Over the past year, MLCO has exceeded EPS estimates 75% of the time and revenue estimates 75% of the time, indicating a strong and consistent performance in the market.
- Positive Market Response: With Macau gaming revenue exceeding expectations in March, Melco Resorts is recognized as a standout in the Macau casino sector, boosting investor confidence in its future performance.
- Valuation and Growth Potential: Analysts suggest that Melco Resorts is currently undervalued, with upcoming catalysts likely to drive stock price increases, particularly against the backdrop of growth in the Macau market.
See More
Studio City International to Release Q1 2026 Financial Results
- Earnings Release Announcement: Studio City International Holdings Limited is set to release its unaudited financial results for Q1 2026 on April 30, 2026, reflecting the company's commitment to transparency and investor communication.
- Market Risk Disclosure: The press release highlights that future performance may be impacted by changes in the Macau gaming market, economic conditions, and the implementation of government regulations, indicating the company's sensitivity to market dynamics.
- Forward-Looking Statements: The company includes forward-looking statements in its release, emphasizing potential risks and uncertainties, which reflects a cautious approach towards future business development.
- Shareholder Information Disclosure: The company underscores its commitment to filing periodic reports with the U.S. Securities and Exchange Commission, ensuring that shareholders and investors receive timely information, thereby enhancing market trust.
See More
Texas Capital Sees Upside for Melco Resorts & Entertainment
- Cash Flow and Capital Structure: Analyst David Bain highlighted that Melco Resorts & Entertainment's (MLCO) free cash flow and capital structure provide unique corporate optionality, with the parent company able to purchase MLCO's float at a 56% premium to Friday's closing price, utilizing one turn of leverage for capital operations.
- Dividend Yield Potential: Bain noted that half of Melco's future net free cash flow could be allocated to create a ~9% dividend yield, while the other half would go toward debt repayment, thereby enhancing the company's financial stability and attractiveness to investors.
- Share Repurchase Plans: Melco could also opt to initiate an accelerated share repurchase program or aggressively buy back shares under its $710 million buyback authorization, which would further boost earnings per share and enhance shareholder value.
- Buy Rating and Price Target: Texas Capital maintains a Buy rating on Melco Resorts with a price target of $11.50, representing over 100% upside from current trading levels, despite the stock being down more than 27% year-to-date.
See More
Melco Resorts Releases 2025 Sustainability Report
- Energy Efficiency Achievements: Melco Resorts has implemented energy efficiency measures that have resulted in annual savings of over 71.7 million kWh, equivalent to the electricity consumption of over 10,000 homes, significantly reducing operational costs while enhancing environmental accountability.
- Water Conservation: The company has achieved annual savings of over 290,000 m³ of water through effective management practices, which is equivalent to saving 116 Olympic-sized swimming pools, thereby strengthening its leadership position in sustainability.
- Community Engagement: Over 4,100 colleagues participated in 486 volunteering activities, showcasing the company's commitment to social responsibility, while delivering over 763,000 learning hours to enhance employee skills and promote professional growth.
- Supply Chain Sustainability: In 2025, 100% of bed and bath linens were sourced with OEKO-TEX® certification, ensuring product safety, while 80% of chemicals procured were rated green or amber, reflecting the company's proactive efforts in environmental stewardship.
See More
Macau's April Gaming Revenue Rises 5.5% Year-on-Year
- Revenue Growth: According to the Gaming Inspection and Coordination Bureau, Macau's gross gaming revenue (GGR) rose 5.5% year-on-year in April to 19.9 billion patacas ($2.46 billion), indicating signs of market recovery.
- Sequential Decline Analysis: Despite the year-on-year increase, April's revenue was down 12.6% from March, primarily due to the month being traditionally slow with no extended holidays to boost activity.
- Year-to-Date Performance: For the first four months of 2026, Macau's GGR is up 12.1% year-on-year to 85.8 billion patacas ($10.6 billion), yet still down 14.5% from pre-pandemic levels in 2019, highlighting the challenges in market recovery.
- Market Pressure Warning: Analyst Vitaly Umansky noted that the deceleration in revenue growth and increased margin pressure could lead casino operators to become more vigilant regarding expense fluctuations and player reinvestment as uncertainties loom ahead.
See More
Melco Resorts Q1 Earnings Beat Expectations
- Earnings Beat: Melco Resorts reported a Q1 GAAP EPS of $0.20, exceeding expectations by $0.08, indicating a strong rebound in profitability and reflecting its competitive edge in the Macau market.
- Significant Revenue Growth: The company achieved revenues of $1.37 billion in Q1, an 11.4% year-over-year increase, surpassing expectations by $40 million, demonstrating positive progress in the recovery of tourism and gaming operations, which solidifies its market position.
- Optimistic Market Outlook: As the Macau market recovers, Melco Resorts is recognized as a standout in the casino sector, with analysts expressing optimism about its future growth potential, likely attracting more investor interest.
- Upcoming Catalysts: The company is viewed as undervalued, with several catalysts on the horizon that could drive stock price increases, including sustained market demand and potential rating upgrades, further boosting investor confidence.
See More
Melco Resorts Q1 Earnings Announcement Scheduled
- Earnings Release Date: Melco Resorts & Entertainment (MLCO) is set to announce its Q1 earnings on April 29 before market open, with consensus EPS estimate at $0.09 and revenue forecast at $1.33 billion, reflecting an 8.1% year-over-year growth.
- Performance Beat Record: Over the past year, MLCO has exceeded EPS estimates 75% of the time and revenue estimates 75% of the time, indicating a strong and consistent performance in the market.
- Positive Market Response: With Macau gaming revenue exceeding expectations in March, Melco Resorts is recognized as a standout in the Macau casino sector, boosting investor confidence in its future performance.
- Valuation and Growth Potential: Analysts suggest that Melco Resorts is currently undervalued, with upcoming catalysts likely to drive stock price increases, particularly against the backdrop of growth in the Macau market.
See More
Studio City International to Release Q1 2026 Financial Results
- Earnings Release Announcement: Studio City International Holdings Limited is set to release its unaudited financial results for Q1 2026 on April 30, 2026, reflecting the company's commitment to transparency and investor communication.
- Market Risk Disclosure: The press release highlights that future performance may be impacted by changes in the Macau gaming market, economic conditions, and the implementation of government regulations, indicating the company's sensitivity to market dynamics.
- Forward-Looking Statements: The company includes forward-looking statements in its release, emphasizing potential risks and uncertainties, which reflects a cautious approach towards future business development.
- Shareholder Information Disclosure: The company underscores its commitment to filing periodic reports with the U.S. Securities and Exchange Commission, ensuring that shareholders and investors receive timely information, thereby enhancing market trust.
See More
