Melco Resorts upgraded to outperform rating from Credit Suisse

Credit Suisse analysts highlighted strong performance and positive catalysts.

Macau.- Analysts at Credit Suisse Group have upgraded Melco Resorts & Entertainment rating to “outperform” in their latest research report. The ratings group highlighted the upcoming summer holidays and Chinese policy changes as positive catalysts.

Kenneth Fong, an analyst at Credit Suisse, said Melco Resorts is expected to benefit from a better-than-anticipated recovery in the first quarter of 2023, supported by a favourable government environment in Macau. Fong emphasised the company’s performance so far in 2023, attributing it to the introduction of non-gaming events and offerings.

He said: “We like MLCO’s quality non-gaming assets, proven by its recent successful launch of non-gaming events, which should offer the most positive earnings surprise in 2Q23. This should also benefit the company from a mass-driven recovery ahead, while the sustainability of the ability to attract new players remains to be seen.” 

He acknowledged the potential for a mass-driven recovery in the future, while also noting the importance of sustaining the ability to attract new players. The combination of the upcoming summer holidays, policy stimulus, and strong Q2 earnings were all cited as factors that could drive share price gains for Melco Resorts. 

For the first quarter, the company posted revenues of US$716.5m, up 51 per cent compared to the first quarter of 2022 ( US$474.9m). Group chairman and CEO Lawrence Ho expressed his optimism about the recovery in Macau, stating that it had surpassed their expectations.