Investment bank Morgan Stanley has lowered its 2025 GGR and EBITDA estimates for Macau’s gaming industry, but still expects “slight but steady growth” for the year ahead.
In a note, analysts Praveen Choudhary, Gareth Leung and Stephen Grambling said they maintain their mass GGR forecast assumption at 118% of 2019 levels, representing a 5% increase over 2024, but expect lower EBITDA than originally expected due to increased reinvestment costs, including in non-gaming capex requirements under operators’ current 10-year concession deals.
Nevertheless, industry EBITDA should still grow by 6% year-on-year to US$8 billion.
Breaking down its forecast further, Morgan Stanley said it has cut its 2025 GGR forecast by 4% to MOP$238 billion and 2026 GGR forecast by 3% to MOP$250 billion. Mass and slot GGR should still account for 90% of total GGR, growing to 118% of 2019 levels next year and 124% in 2026.
Industry EBITDA estimates have been cut by 7% for 2025 to US$7.99 billion and by 6% for 2026 to US$8.57 billion – both still exhibiting steady year-on-year growth.
Morgan Stanley prefers Sands China and Galaxy Entertainment Group as its top stock picks due to “more visible market share momentum, dividend resumption and LVS share buybacks.”
Among the mid-caps, the investment bank said it prefers MGM and Wynn over Melco for “higher dividend yields and cheaper valuations”.
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