The previous year was largely lackluster for Macau casino shares, and with the December and 2024 gross gaming revenue (GGR) report published earlier today showing a similar response, some investors might not be keen on these stocks as 2025 begins. Nevertheless, at least one analyst thinks the group is poised for growth this year. 

In a recent report for clients, Stifel analyst Steven Wiecyznski noted that market participants have sufficiently accounted for worries about the macroeconomic situation in China, suggesting that Macau gaming stocks might offer growth this year.

"We believe the setup is compelling for Macau-centric names heading into 2025. Stocks massively underperformed our coverage universe not only in 2024 but also since the pandemic kicked in. China macro fears remain the primary culprit as to why investors don’t want to revisit this group,” wrote the analyst. “However, based on current trading levels, we believe the market has priced in more than enough China macro pressures (as well as a Trump administration) at this point.”

Data revealed earlier Tuesday show that Macau operators achieved $28.3 billion in GGR last year, reflecting a 24% increase compared to the previous year. 

Wynn Might Be the 2025 Victors Among Macau Casino Shares 

According to earnings and revenue percentages, Las Vegas Sands (NYSE: LVS) and Wynn Resorts (NASDAQ: WYNN) are the biggest US-listed operators in Macau, and their stocks underperformed last year, with the former rising slightly over 4% and the latter dropping over 5%. 

Although Wynn had a lackluster performance in 2024, Wieczynski is optimistic that the Wynn Macau parent can recover this year, possibly surpassing competitor Sands due to Wynn Macau's clientele being less affected by China's economic situation compared to Sands China, which relies heavily on mass market patrons for a large portion of its revenue. 

“We believe WYNN’s relative premium mass exposure will help them be less sensitive to macro pressures whereas LVS is more dependent on bass mass visitation,” added the analyst. “We aren’t sitting here and trying to say a weaker China macro backdrop won’t impact Macau visitation/spend levels, but we would argue the market has already priced in a greater impact versus what will be observed.”

Wieczynski noted that for Wynn, which has options outside of Macau that could be utilized this year, and for other Macau casino stocks, it’s been some time since these shares attracted investors; 2025 might be the year when that attraction is justified, and “the risk/reward is too compelling to ignore.” 

Increased GGR Growth Might Boost Macau Casino Stocks 

Highlighting the 2024 letdown experienced by Macau gaming stocks is the fact that the group usually fluctuates together with GGR. Gaming revenue in the Chinese region skyrocketed last year, yet stocks did not replicate this trend. 

This year could see a reversal of that scenario, as Macau’s 2024 GGR figure reached 80% of the levels seen before the coronavirus, suggesting potential for further growth in 2025. 

“We believe investors need to focus on what the full-year 2025 could look like from a recovery/growth standpoint and believe consensus estimates could end up being conservative,” concluded Wieczynski. “Trying to model out the next six to twelve months does remain challenging given what is happening with government stimulus etc. We assume 1Q25 shows a 7%-9% y/y acceleration followed by an 8%-12% acceleration for 2Q25. At this point we believe full-year 2025 GGR should see growth in the range of 4%-10% over 2024.”