As Las Vegas Sands kicks off gaming’s first high-profile fourth-quarter earnings report Wednesday afternoon, Bank of America has released its preview for the industry, including continued softness on the Strip and likely the same for the first quarter.
“We are modestly below the Street for Las Vegas, in line for Asia, and see a mixed bag for regionals,” said BofA analyst Shaun Kelley. “December data came in soft across online, Vegas (revenue per room), and regionals, but we noted in our year ahead that locals and regionals could be One Big Beautiful Bill and fiscal stimulus beneficiaries, respectively.”
Bank of American reported their fourth-quarter estimated earnings are coming in 1% for consensus and 2% for MGM Resorts International.
“Gaming revenues were solid, but revenue per available room/visitation remained weak at -6%/-5%, respectively, and we suspect December was light with Strip revenue per room -12% (versus -9% in November),” Kelley said. “We believe the first quarter could also come in a bit softer, despite the ConAgg convention, before comps ease in the second quarter.”
When it comes to casinos that serve local residents, Kelley said their estimates are 2% higher than consensus, with data suggesting solid local trends have continued.
The fourth-quarter regional estimates are 1% above the consensus, driven by strength at MGM and Boyd Gaming, though Kelley said they expect some weakness for Penn Entertainment on Louisiana competition. They estimate same-store gaming revenue was 4% higher year-over-year in October, negative 1% year-over-year in November, and negative 3% year-over-year in December.
“Caesars’s fourth-quarter gaming revenue growth rates are tracking back closer to the market after having meaningfully jumped up back in May, which could imply promotional intensity is starting to level off,’ Kelley said.
For online gaming, 2026 has picked up right where 2025 left off, with online sports betting dominating their call volume and conversations, Kelley said. He said their bridges are ahead of consensus for DraftKings, but below for FanDuel. Hold was better than expected, but weak December and January handle is reigniting concerns.
During the fourth quarter and so far into January, gaming stocks are down 9%, with U.S. operators down 4%, Macau operators down 13%, and digital/online gaming stocks down 23%, Kelley said.
In Macau, their fourth-quarter estimates for adjusted earnings are in line with consensus, Kelley said. “Revenues were solid (+15% year-over-year and +6% quarter to quarter), and we are +1% above the Street driven by MGM China. Attention will likely be focused on Las Vegas Sands’s market share progress, while investors seem increasingly concerned about tough comps starting in the second quarter.”
Kelley said their Marina Bay Sands estimate is 2% above the consensus at $705 million and could be helped by F1 shifting from the third quarter to fourth quarter, “with market revenue per room up 27% in October and 13% for all of fourth quarter after being flat most of 2025.”
When it comes to Las Vegas Sands, Kelley’s price target of $70 is based on about 13 times their 2026 EBITDAR estimate, a slight discount to historical average of 13 times, given slowing recovery, China macro, and lower free cash flow conversion due to the concession capex.
Risks to the downside are a delayed recovery in Macau, continued COVID-related disruption, increased uncertainty surrounding the implications of the concession process, the pace of re-opening in Singapore, and a worse ramp than expected for new properties.
Risks to the upside are a faster-than-expected return to pre-COVID Macau environment, potential border re-openings, better-than-expected returns on recent projects, mass market growth in Macau, and potential entry into the sports betting and igaming verticals.
