Citi has released a research report adjusting price targets for several Macau casino operators. The bank lowered the target price for GALAXY ENT (00027) by 3.7% from HK$54 to HK$52. It also reduced the target for MGM CHINA (02282) by 5.2% from HK$18.25 to HK$17.3 and cut the target for SJM HOLDINGS (00880) by 7.2% from HK$1.94 to HK$1.8. The bank maintained unchanged price targets for Melco Resorts & Entertainment (MLCO.US) and Wynn Macau (01128). In contrast, Citi raised the target price for SANDS CHINA LTD (01928) by 4.3% from HK$23 to HK$24 and increased the target for its parent company, Las Vegas Sands Corp. (LVS.US), by 2.28% from US$76.75 to US$78.5.

Citi estimates that Macau's gross gaming revenue (GGR) will grow 14% year-on-year in the first quarter of 2026, which is expected to translate into an 8% increase in industry EBITDA. The bank attributes the slower growth in EBITDA compared to GGR to an unfavorable mix between the VIP and mass-market segments. It also suspects that lower player retention rates in some casino VIP rooms have impacted profitability. Despite this, Citi forecasts that industry EBITDA margins will remain at a reasonable level of around 27%, indicating that reinvestment in patrons remains appropriate.

The report notes that the positive growth in GGR and EBITDA this quarter should remind investors that gamblers' enthusiasm for gaming appears unaffected by ongoing geopolitical tensions and economic uncertainties. Citi believes that Macau's sustainable operating cash flow and attractive dividend yields—with Hong Kong-listed companies expected to offer yields of 5-7% for the 2026 fiscal year—warrant greater investor attention.