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Takeaway: Bad number off of easy comp


We continue to like the Macau stocks – on the short side. After some signs of stability recently, the month of May looks more like an anomaly and not the trend. When the month ends, June should prove trendy, that is, more consistent with Macau’s 15 month long sequential slide than May’s respite. We’re now predicting a YoY decline of 33-36%, down 3% from our forecast last week. This past week was supposed to be an easy comp.

More important than just the weekly slide, the bigger concern for us is the degradation in the high margin base mass segment.  The disparity from Street expectations may be wider and worse in the base mass segment than any other which should have an outsized impact on estimates going forward. Indeed, we remain well below Street EBITDA estimates for 2015 and especially 2016 for all of the Macau operators, particularly for the base mass leader LVS.

Please see our detailed note: