Casino Stocks Lower As Two Analysts Issue Bearish Comments

Casino stocks on Tuesday traded lower as analysts from both Deutsche Bank and Credit Suisse issued bearish comments and a weak outlook for the industry. Shares of

and

were trading lower by around three percent Tuesday morning. At the same time, shares of

were lower by 2.3 percent while shares of

were lower by around 1.5 percent. Credit Suisse's Hong Kong based analysts, led by Kenneth Fong commented in a note that the gaming sector's fundamentals "continue to stay weak" with further downside likely. The analysts cited further declines in Macau's average daily revenue into March to MOP 675 million (approximately $84.45 million) from MOP734 million, post Chinese New Year. "While we reckon that we shouldn't read too much into the a single data point, the persistent decline of daily run rate suggests that the sector's fundamentals are yet to bottom, in our view," Fong wrote. "In the near term, we expect a continued weakening trend on gradual closure of VIP rooms (hurting both VIP and premium mass segments) and slow premium mass revenue (dragged by the VIP segment)." Fong suggested that March's gross gaming revenue may drop as much as 36 percent to 43 percent year over year, worsening from the 35 percent drop seen in January to February 2015. The analyst suggested the sector is "unattractive" and if a slower-than-expected recovery takes place, the sector could "easily" see a sharp correction on a combination of earnings downgrades and multiple derating.