CLSA has released a research report indicating a shift toward a more cautious outlook on Macau's gaming revenue, citing a lack of sufficient supportive macroeconomic indicators. The firm has consequently reduced its 2027 and 2028 gross gaming revenue (GGR) forecasts for Macau by 4% and 3%, respectively, setting them at MOP 259.2 billion and MOP 270.4 billion, which implies year-on-year growth of 2% and 4%.

The brokerage noted that EBITDA margins could come under pressure as operating expense growth may outpace the pace of GGR expansion. In this environment, Galaxy Entertainment (00027) stands out as the firm's sole preferred stock pick within the sector. CLSA has maintained its 2026 GGR forecast but has slightly raised its September projection, adjusting it from a 0.3% year-on-year increase to a 1.7% rise, while lowering expectations for the fourth quarter.

The firm believes that the next phase of growth catalysts is unlikely to emerge in the near term, and margin pressures may persist into 2027. CLSA has kept its ratings on various stocks unchanged, primarily adjusting target prices due to downward revisions in earnings forecasts.

Among the adjustments, the target price for Galaxy Entertainment has been cut from HK$41.5 to HK$39.7, while Sands China Ltd (01928) sees its target reduced from HK$17.2 to HK$16.2. MGM China (02282) has its target lowered from HK$14.1 to HK$13.8, and Melco Resorts & Entertainment (MLCO.US) has its target trimmed from US$6 to US$5.3. The firm maintains an "Outperform" rating on these five stocks.

Conversely, the target price for Wynn Macau (01128) has been raised from HK$5.5 to HK$7.1, also with an "Outperform" rating. Additionally, CLSA has maintained its target price of HK$1.4 for SJM Holdings (00880), keeping an "Underperform" rating on the stock.