Morgan Stanley says Macau casino stocks will continue to provide good returns to investors – at least in the medium term.
The investment bank says in a note to investors that consensus casino revenue forecasts for next year are not very high.
It suggests that casino stocks should see forward earnings before interest, tax, depreciation and amortisation of 16 times price.
But there is increasing uncertainty for casino stocks in the longer term. It says the lack of new casinos in the next two years, the limit on live gaming tables, uncertainty about the renewal of the licences of the six casino operators and the shift to mass-market gaming may affect earnings.