Wynn, Sands shares fall after Macau posts June gaming revenue

Macau’s cooling gaming growth is having a chilling effect on Las Vegas stocks.

Shares of Wynn Resorts Ltd. and Las Vegas Sands Corp. tumbled Monday after the Chinese enclave posted June gaming revenue that missed analyst forecasts.

Wynn shares fell 7.9 percent to $154.14, their lowest close this year, while Sands dropped 6.7 percent to $71.27, near a three-month low. Both companies generate more than 50 percent of their revenues from Macau.

Macau gross gaming revenue rose 12.5 percent to $2.78 billion in June, missing the 18 percent growth forecast by Wall Street analysts.

Macau gaming revenue has now missed analyst forecasts two months in a row, prompting Union Gaming to cut its 2018 growth forecast to 17 percent.

‘Fundamentally sound’

Revenue growth was strong over the first half of June and slipped noticeably in the last week, Union Gaming analyst Grant Govertsen said in a note Monday.

“Keep in mind that Macau has bad weeks all the time and one bad week doesn’t make a trend,” Govertsen said.

Jefferies gaming analyst David Katz expects Macau gaming revenue growth to pick up later this year with the opening of the Hong Kong-Zhuhai-Macau bridge.

“We believe business remains fundamentally sound” on Macau, Katz said in a note Monday morning.

Las Vegas Sands declined to comment. Wynn Resorts did not respond to a request for comment. Both companies will report their second-quarter earnings toward the end of the month.

Macau gross gaming revenue rose 19 percent over the first half of the year to $18.7 billion and is headed for its best year since 2014.

The June results may have been affected by lower hold as well as the World Cup, which started in the middle of the month, the analysts said.

The Chinese enclave was also facing one of the toughest monthly comparisons with 2017. Macau gaming revenue rose 26 percent in June of last year, the second-best performance for that year.

MGM casino

MGM Resorts International opened its second casino in Macau in February. Analysts hoped the $3.4 billion resort would generate enough excitement to pull in larger crowds. That hasn’t happened yet, Govertsen said.

“We’re not seeing the market-growing benefit from the most recent supply, as it needs to be finished before it can begin ramping properly,” he said.

MGM Resorts, which generates just 21 percent of its revenue from Macau, saw its stock fall 3 percent to $28.16, it’s lowest in more than a year.

The Review-Journal is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson.

Contact Todd Prince at 702-383-0386 or tprince@reviewjournal.com. Follow @toddprincetv on Twitter.