Trade war creates headwinds for Macau gaming stocks

Macau gaming stocks are feeling the heat from the trade war between the U.S. and China, falling to their lowest levels in a year, with some analysts cutting their growth forecasts on concern for a slowdown in China’s economy. Both Deutsche Bank and Morgan Stanley have both recently reduced their estimates for gross gambling revenue for this year and next. Deutsche Bank’s forecast for 2018 has been trimmed to 13.9 percent from 14.2 percent, while it expects growth to drop to 6.8 percent in 2019 and slow further to 5.1 percent in 2020. Morgan Stanley, while noting that it still sees Macau as a long-term growth story, cut its 2018 GGR estimate to 13 percent from 16 percent and more than halved its estimate for next year to 5 percent from 12 percent previously. “3Q18 EBITDA in general will disappoint, and we expect consensus earnings revision to be down meaningfully over...

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