Melco Resorts & Entertainment (MLCO – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst George Choi from Citi maintained a Hold rating on the stock and has a $6.25 price target.
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George Choi has given his Hold rating due to a combination of factors influencing Melco Resorts & Entertainment’s current and future performance. The company has shown a promising start in 2025 with its strategic decision to explore asset-light opportunities, particularly in Macau and potentially Thailand. This approach is expected to aid in deleveraging and allow management to concentrate on core markets. However, the potential value from these strategies is still uncertain, which contributes to the Hold rating.
Additionally, while there has been a notable increase in revenue and property visitation, the company’s adjusted property EBITDA has seen a slight decline. The Macau GGR market share remains stable, but the EBITDA margin has decreased slightly. These mixed results, along with the expected rise in operational expenses due to new ventures like the reopening of the House of Dancing Water, suggest a cautious outlook, justifying the Hold recommendation.