Las Vegas and Macau can expect continued economic pressure in the near future, according to Jefferies Equity Research analyst David Katz.
Macau’s comeback continues to be subdued, Katz wrote in an investor note published Wednesday. He added, “Seasonal weakness persists in Las Vegas as demand becomes more dependent on marquee events and conventions.”
Katz explained that Macanese casino revenues “reflect a challenging period of persistent topline weakness, initially triggered by the World Cup and exacerbated by difficult year-over-year comparisons against a robust mid-2025.” Gambling revenue hasn’t rebounded following a World Cup-related slowdown, instead continuing to decline through September, the fourth straight month of negative comparisons.
Although not as severe as June’s 12.1 percent plunge or July’s 8.4 percent dive, Macanese casinos were down 1.2 percent in September, the same as in August. Katz blamed a blasé Chinese economy, as well as more-restricted currency movement.
“Current sentiment remains subdued, as the sector transitions toward a more mature growth phase,” wrote Katz. However, he’s confident that certain trends point toward a medium-term growth rate around five percent.
Catalysts are needed, Katz wrote. He cited infrastructural investment, more diversified entertainment offerings, and better courtship of the higher tiers of the mass-market player segment.
Among marquee gaming stocks, Katz focused on three: Wynn Resorts, Las Vegas Sands, and MGM Resorts International. He was Buy-rated only on Wynn, with a Hold rating on the other two.
However, Katz lowered his price targets for all three stocks. Wynn came down to $138 per share from $144 and Sands was shaved from $47 apiece to $40. MGM’s price target was lopped from $45 a share to $34, the most severe downgrade.
Katz elaborated that MGM finds itself between a customer base in the United States that needs to be stabilized and overseas opportunities to grow its online business. He acknowledged softness among MGM’s lower-end Las Vegas properties, offset by a very strong convention calendar and continued solidity in the upper echelons of its business.
“Regional operations remain a pillar of stability, while a potential MGM Springfield divestiture represents a portfolio catalyst,” Katz continued. He added that MGM China should be able to continue holding approximately 15 percent market share in Macau.
Heightened China-facing promotional efforts are expected of Sands’s premier Macanese casinos, particularly Venetian Macao and The Londoner. Of the latter two, Katz opined, “The company continues its transition toward high-end hospitality, while maintaining market share.”
Still, Katz sees a long comeback road ahead for Sands in China, with room makeovers at Venetian Macao extending into early 2028.
In Singapore, Sands is encountering a slowdown in growth and harder year-over-year comparisons. Even though Resorts World Sentosa sunk to historic lows in terms of market share, Katz thought this to be a bottoming out of the rival property, as it completed renovations and expansions. Marina Bay Sands’s own expansion remains on track for a January 2031 deployment.
Katz’s preferred operator, Wynn, was said to be exploiting its high-end casino product to outdo the rest of the Las Vegas Strip in performance. But it did so well in the third quarter of 2025 that a significant 2026 outperformance was thought unlikely, even difficult.
In Macau, Wynn’s prospects are complicated by slumping high-roller play, as well as the World Cup hangover. And Wynn is confronted with “a near-term predicament” in Boston, Katz said, as 1,300 Encore Boston Harbor employees continue to picket the casino in an ongoing labor dispute.
