Credit Suisse: Macau Gaming "Likely Not Far From A Bottom"

According to a recent report, Credit Suisse analysts believe the Macau gaming market is near a bottom. Analysts are recommending investors start slowly building positions in gaming stocks.
Revenue rebound
After a six percent drop in gaming revenue in 2014, Credit Suisse is forecasting a 13 percent increase in revenue in 2015. Analysts see a potential increase in the efficiency of large junkets leading to more VIP gaming in the upcoming year.
Stock picks
According to the report, Q2 2015 will mark the turning point for Macau-exposed gaming stocks. Credit Suisse rates the stocks of Melco Crown Entertainment MPEL and MGM Resorts International’s MGM MGM China at Outperform. Las Vegas Sands Corp’s LVS Sands China, Galaxy Entertainment Group, and SJM Holdings are rated Neutral. Finally, Wynn Resorts Ltd’s WYNN Wynn Macau and Macau Legend are rated Underperform.
A tough 2014
This past year was tough for the Macau gaming market. A government crackdown on Macau currency law violations and VIP junket operations spooked many wealthy gamblers, and gaming revenue in Macau started to plummet. Weakness in the Chinese economy and political protests also likely contributed to the unwillingness of gamblers to make the trip to Macau from mainland China in the second half of 2014.
Other analyst action
Credit Suisse is not the only firm to weigh in on their top Macau gaming stock picks recently. Earlier this month, Morgan Stanley upgraded Melco Crown from Equal-weight to Overweight and set a $28 target for the stock. In December, FBR Capital reiterated their Outperform rating on MGM and set a $30 target for the stock.