Seaport Research Partners has slightly downgraded its price targets for all Macau gaming stocks on China macro risks but says it still believes Macau operators, as well as Las Vegas Sands’ presence in Singapore, remain undervalued.
In a research note previewing the looming 3Q25 results season – which will kick off with LVS on Thursday morning (Asia time) – Seaport’s Vitaly Umansky pointed to ongoing investor concerns over the slowdown seen in early October and whether Macau’s recent growth spurt has been tempered.
This, he explained, has led to stock prices being “over corrected” since August’s post-COVID GGR high and provides an opportunity for investors moving forward.
“We believe … the growth trends for Macau remain in place,” Umansky wrote. “Current valuations remain low, especially after the selloff over the last 2 months on concerns around growth deceleration and China macro. While there are Macau specific and China macro risks (along with geopolitical risks), gaming stock valuations (in particular those with Macau exposure) remain largely too low, resulting in a strong risk/reward positioning.”
The recent correction is not warranted, the analyst continued, with Macau stocks currently trading at a 24% discount to the pre-COVID period at 9.0x EV/EBITDA.
“At current valuation levels, we believe investors are being well compensated to take on China-related risk,” he said.
LVS, the parent company of Marina Bay Sands and majority shareholder of Macau concessionaire Sands China, could see additional upside as result of its Singapore presence, Umansky continued ahead of the company’s upcoming results release.
Although increased player reinvestment in Macau could weigh on LVS’ margins in Q3, “LVS could surprise on the upside with a strong showing in Singapore,” he wrote. “We remain of the view that Singapore remains undervalued by investors and it will continue to beat expectations.”
