Morgan Stanley has updated its risk-reward assessment for Galaxy Entertainment (00027). The firm has lowered its target price for the stock from HK$39 to HK$37, implying a potential upside of approximately 12% from the current share price, while maintaining an "In-Line" investment rating. The reduction in the target price is primarily due to a 4% downward revision in the forecast for 2026 equity free cash flow (FCFE), reflecting a 4% cut to the full-year EBITDA estimate. This adjustment incorporates actual first-quarter 2026 performance, with the lower full-year EBITDA forecast accounting for factors such as reduced revenue assumptions and higher promotional costs. Morgan Stanley currently projects Galaxy Entertainment's property EBITDA for 2026, 2027, and 2028 to be HK$15.2 billion, HK$16.9 billion, and HK$18.2 billion, representing year-on-year changes of -3%, +11%, and +8%, respectively. The firm's EBITDA forecasts for 2026 through 2028 are approximately 5%, 2%, and 4% below the market consensus, respectively.