Macau’s Gaming Recovery Accelerates, Boosting Melco Resorts Outlook
03.02.2026 - 11:29:04
The gaming sector in Macau has begun 2026 with remarkable momentum, posting revenue figures that have comfortably exceeded market forecasts. This robust performance signals a deepening recovery for the industry, with premium customer demand providing a significant tailwind for operators like Melco Resorts & Entertainment ahead of the Lunar New Year holiday.
Market-wide gross gaming revenue (GGR) for January reached 22.6 billion patacas, representing a substantial 24% year-on-year increase. This growth rate notably surpassed the 18% advance that analysts had projected. Compared to the previous month, revenue climbed by 8.2%. Observers attribute the strength primarily to vigorous activity in the premium mass segment, indicating a recovery trajectory that is bringing the market closer to its pre-pandemic performance, supported by consistent visitor traffic from mainland China.
Lunar New Year Bookings Signal Continued Strength
The upcoming Lunar New Year period, spanning February 15 to 23, is poised to deliver the next wave of growth. Sampling of booking systems for Melco's integrated resorts reveals high occupancy levels during the core holiday dates. Premium room inventory is already fully booked for key dates at luxury properties including the Nüwa and Morpheus towers within the City of Dreams complex, as well as the Celebrity Tower at Studio City. This pattern underscores the region's enduring appeal to high-spending tourists during major festivals.
Operational Milestones and Divergent Analyst Views
Beyond financial metrics, the company recently secured prestigious recognition. On January 30, the Macau government awarded the production team of "The House of Dancing Water" the Medal of Merit for Tourism. The show, which returned in May 2025 following a technical modernization, is considered a cornerstone of the non-gaming entertainment offerings.
Should investors sell immediately? Or is it worth buying Melco Resorts, Entertainment?
Analyst sentiment on Melco's stock has been mixed. On January 22, Texas Capital Securities initiated coverage with a "Buy" rating and a $11.50 price target, highlighting the company's strategic focus on the premium segment. In contrast, JP Morgan maintained a more cautious "Neutral" stance with a $7.70 target in a mid-January assessment.
Financial Snapshot:
* January GGR: 22.6 billion patacas (+24% YoY, +8.2% MoM).
* Upcoming Catalyst: Q4 2025 earnings report scheduled for February 26.
* Earnings Estimate: Analysts currently project a profit of approximately $0.12 per share for Q4 2025, marking a significant year-over-year improvement.
* Key Period: High demand observed for Lunar New Year (Feb 15-23).
The market will gain a clearer picture of Melco's financial health when the company releases its fourth-quarter 2025 results on February 26. The figures will reveal how effectively the operator has converted the current market expansion into bottom-line profitability.
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