It’s a difficult time for gaming stocks, according to J.P. Morgan analyst Daniel Politzer in an investor note released on Tuesday.
“Las Vegas’ recovery appears to have slowed,” Politzer noted, adding that Macau’s seeming bounce-back from World Cup doldrums was also proving illusive. Regional casinos, he added, were “doing just fine,” but investors didn’t seem to care.
Even so, Politzer listed Station Casinos and Penn Entertainment as his top picks in the sector.
Regarding Las Vegas, Politzer queried the status of People Inc.’s proposed buyout of MGM Resorts and whether a deal was even still on. What, he asked, is taking so long?
Investors, Politzer said, had gone from being unimpressed by People’s owner Barry Diller’s $48.30-per-share offer to wondering if it was ever genuine at all. He noted that MGM shares had fallen below the $40 threshold and could slip even further if no deal happens, probably to $35 per share.
Conversely, a Diller acquisition could bump their value by $10 and closer to Politzer’s own $53 price target.
“We think MGM’s steady grind lower reflects a combination of decreasing confidence a deal gets done (higher rates don’t help) and a potential step backwards re: Las Vegas Strip’s recovery trajectory,” Politzer mused. He noted that Strip room rates were tracking 10 percent lower in August, five percent down in September, but seven percent higher in October.
Another company seemingly in crisis was Wynn Resorts, trading at a 52-week low. Where is the bottom, Politzer asked? He blamed Middle East conflicts and a lack of solid trends in Macau.
Politzer observed that Wynn stood to benefit from economic disparities; being “at the top of the K-shaped economy makes it a relative outperformer.” However, he observed that Wynn’s markets were not impervious, whether it was to instability in the Middle East or to a sluggish rebound in Macau.
As far as Wynn Al Marjan, “Day-to-day life in Dubai has largely returned to normal, [but] investors still perceive significant risk to if the property will open on time, how the opening will go, and what the ramp will look like.”
Politzer was unfazed by a flat August in regional casinos, noting modest year-over-year growth so far in 2026 and the lack of a Labor Day weekend in August this year. He thought that a combination of easy comparisons ahead and stable trends in regional gambling boded well.
The stock market apparently disagreed, with Boyd Gaming, Churchill Downs, Penn and Station down nine percent as a group. For Politzer, this made for a positive risk-reward scenario on those stocks.
Singling out Station, Politzer wrote that its recent construction upheaval now put the company in a position to harvest a return on those capex investments. He also felt that a major new project was in the offing and that cash flow would be enhanced by the impending North Fork casino in California and its ensuing management fees to Station.
Penn, Politzer said, was “hungry for acquisition,” but was likelier to shore up its balance sheet with more capex projects, such as Boomtown New Orleans. He also lauded its controversial online operations for “effectively managing costs.”
