Why Casino Stocks Jumped Today
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Casino stocks had a great day on Wednesday with a number of companies jumping double digits. There are also market tailwinds with the S&P 500 trading 1.1% higher and the Nasdaq Composite up 2.5%.
Melco's revenue was down 9% to $480.6 million and operating loss was $104.4 million. On the plus side, adjusted property earnings before interest, taxes, depreciation, and amortization (EBITDA) was up to $94 million, showing that cost reductions have helped cash flow even though revenue is weak.
Today's move isn't a game changer for Asia's gambling stocks. Omicron outbreak in Hong Kong caused a lockdown there and China is imposing new lockdowns. If investors are in for years of on-and-off lockdown it will be tough for tourism and gambling to recover in Macao, the Philippines, and Singapore. Casinos have cut spending and there's not a lot of capital expense that needs to happen to build out capacity.
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