Morgan Stanley Trims Macau GGR Forecast for 2026

Morgan Stanley has revised down its outlook for Macau’s gaming sector, lowering its gross gaming revenue (GGR) and earnings expectations for 2026 amid expectations of slower growth and continued pressure on estimates across the industry.

The investment bank now forecasts full-year 2026 GGR at approximately MOP260.6 billion (US$32.3 billion), up from 2025 levels of MOP247.40 billion. This implies annual growth of around 5.3%, below both its earlier projection and broader market expectations of roughly 6%.

Analysts Praveen Choudhary and Stephen Grambling said in a note that “We expect 2026 GGR to grow by 5.3 percent year-on-year, below consensus expectations of 6 percent.” They also noted that quarterly expansion is likely to remain subdued, adding that “Our forecasts imply quarterly GGR growth of only 2 percent to 3 percent year-on-year through fourth-quarter 2026.”

The bank further warned that short-term volatility may intensify, stating that “June and July could see slowdowns related to the [FIFA] World Cup and might even post a negative year-on-year growth number.”

Downward pressure on earnings expectations

Alongside weaker revenue projections, Morgan Stanley also reduced its EBITDA forecast for the sector, trimming its 2026 estimate to 1% from a prior 2%. The revision reflects expectations of slower top-line growth combined with ongoing cost pressures across operators.

The bank said that its most significant operator-level adjustments were linked to Sands China Ltd and SJM Holdings Ltd, driven by weaker expected second-quarter performance. Overall corporate EBITDA across the six Macau concessionaires is now forecast at just under US$7.93 billion for 2026.

Morgan Stanley noted: “We expect negative EBITDA estimate revisions to continue, driven by lower GGR growth expectations and a structurally-higher cost base.”

Ahead of upcoming second-quarter earnings, Morgan Stanley highlighted expected shifts in operator market share across Macau. The bank expects Sands China Ltd and Melco Resorts & Entertainment Ltd to lose share during the quarter, while MGM China Ltd and Wynn Macau Ltd are projected to gain ground.

Sands China’s share is forecast to decline by 2.6 percentage points to 23.6%, while Melco Resorts is expected to fall by 0.8 points to 14.4%.

By contrast, MGM China is projected to rise to 17.0%, up 1.2 points, while Wynn Macau is expected to increase to 13.9%, up 1.3 points sequentially.

Based on these assumptions, Morgan Stanley said “MGM China and Wynn Macau Ltd are projected to exceed consensus EBITDA estimates by circa 9 percent to 10 percent in second-quarter 2026.”

Second-quarter earnings outlook

The bank estimates total property EBITDA for Macau in the second quarter at just under US$2.08 billion, representing a sequential decline of around 4.9% from the prior quarter’s roughly US$2.19 billion. On a year-on-year basis, performance is expected to be broadly flat.

Morgan Stanley added that while some operators may outperform expectations, others face more difficult comparisons. It stated that “Peers appear to face higher hurdles, with required growth appearing more back- ended and dependent on a recovery in share.”

According to GGRAsia, the analysis also pointed to differences in risk profiles among operators, noting that MGM China and Wynn Macau Ltd are positioned with relatively stronger first-half momentum and fewer downside risks to estimates.

In a separate assessment of sector conditions ahead of the 2Q26 earnings season, Morgan Stanley said it remains cautious on Macau gaming equities despite valuations appearing attractive.

Analysts Praveen Choudhary and Stephen Grambling said recent trends in GGR growth, combined with negative operating leverage, continue to drive downward revisions across the market. They expect this pattern to persist given lower growth assumptions and a structurally higher cost base.

The bank also observed that investor recognition of free cash flow generation and dividend yields among concessionaires remains limited despite their underlying strength.

Within the sector, MGM China was highlighted as a preferred name. Morgan Stanley noted: “We downgraded the stock to “Equal Weight” in December 2025 after a sharp royalty payment jump, driving negative corporate EBITDA revisions, which we think are complete. Since then, MGM China has surprised the market by holding share despite strong competition. It has one of the lowest capex levels, a better balance sheet and less risk of negative estimate revisions.”