JPMorgan keeps Galaxy Entertainment top pick as Macau GGR drops 12%

JPMorgan kept Galaxy Entertainment as top Macau gaming pick after June GGR sank 12% to MOP18.5 billion, the first YoY drop in 17 months.

"Although the market had expected the FIFA World Cup to drag on the gaming industry, the data still hurts sentiment and could trigger a fresh round of downward revisions to second-quarter earnings forecasts," JPMorgan analysts said in a report.

The broker's pecking order ranks Galaxy Entertainment (00027.HK) first with an Overweight rating and HKD52 price target, followed by Sands China Ltd (01928.HK) and Wynn Macau (01128.HK), both also rated Overweight with targets of HKD22 and HKD7.5, respectively. MGM China (02282.HK) and Melco Resorts & Entertainment (MLCO.US) carry Neutral ratings with targets of HKD13.2 and USD6, while Melco International Development (00200.HK) and SJM Holdings (00880.HK) are rated Underweight with targets of HKD3.5 and HKD2.

Macau gaming stocks have corrected 27% since the start of the year, JPMorgan noted, though the firm said the current entry point remains unattractive and maintained a selective investment strategy on the sector. The 17-month streak of YoY growth ended as the World Cup diverted tourist traffic and gaming spending away from Macau's casinos during June.

Galaxy's Phase 4 project, set to open next year, provides a differentiated growth driver that underpins the broker's preference over peers such as Sands China and Wynn Macau. Citi Research has suggested a concert-led recovery could emerge toward month-end, while Galaxy's Phase 4 construction progress remains a key event to watch for 2027. Investors will watch July revenue data for confirmation of a rebound.

This article is for informational purposes only and does not constitute investment advice.