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Galaxy Entertainment shares jump after better-than-expected quarterly results

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Posted: Feb 23, 2023 11:07pm EST

By Yifan Wang

Shares of Galaxy Entertainment Group Ltd rose as investors welcomed the Macau casino operator’s better-than-expected results.

The stock rose 6.4 percent on Friday and was last up 5.6 percent at HK$54.80 ($6.98), on track for its best day since December.

galaxy…

By Yifan Wang

Shares of Galaxy Entertainment Group Ltd rose as investors welcomed the Macau casino operator’s better-than-expected results.

The stock rose 6.4 percent on Friday and was last up 5.6 percent at HK$54.80 ($6.98), on track for its best day since December.

Galaxy Entertainment reported a net loss and a 42% drop in revenue for 2022 on Thursday, as China’s strict movement restrictions caused by the epidemic hit Macau’s gaming industry.

But analysts were quick to ignore the year-round weakness and point to near-term recovery trends.

Galaxy Entertainment said its fourth-quarter net income rose 43 percent from the previous quarter, which Citi analysts described as “solid growth” in a note.

The company’s adjusted EBITDA loss also came in well above Citi’s forecast, the analyst said, noting that it was “primarily due to more effective cost control in the quarter than expected.”

Citi raised its 2023 earnings forecast by 86%, while maintaining its buy rating and HK$70 price target on the stock.

Citi is also optimistic about Galaxy Entertainment’s potential ability to outperform rivals in the long run, thanks to its rapidly expanding hotel room capacity and new venues.

“We continue to expect Galaxy to be the long-term market share winner,” the analyst said. “Galaxy remains one of our top picks in the Macau gaming space.”

Write to Yifan Wang yifan.wang@wsj.com

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