The analyst rating from UBS is based on several key factors:
1. Stable GGR Performance: Macau's average daily Gross Gaming Revenue (GGR) remained relatively stable, with a slight decrease from MOP700 million to MOP693 million over the past week, indicating consistent demand.
2. Year-over-Year and Month-over-Month Growth: The month-to-date average daily GGR is approximately MOP712 million, which represents a 21% increase year-over-year and a 6% increase month-over-month. This growth is significantly stronger than the average increase of 2% observed during the same period from 2015 to 2019.
3. Strong Hotel Occupancy: The upcoming Lunar New Year holiday shows promising signs, with 27 out of 32 tracked hotels reporting sold-out rooms, mirroring last year's performance. This suggests robust consumer interest and potential for increased revenue during the holiday period.
4. Top Picks: Based on these positive indicators, UBS has maintained its ratings of "Buy" for GALAXY ENT and WYNN MACAU, positioning them as top picks in the sector with target prices of $46.9 and $8.9, respectively.
These factors collectively support UBS's optimistic outlook on the gaming sector in Macau, leading to their favorable ratings for the mentioned stocks.
