Goldman Sachs: Galaxy Entertainment Group's EBITDA in Macau's gaming industry in the fourth quarter of last year is expected to increase by 4% quarterly, Galaxy Entertainment's stock (00027) has risen by nearly 30%.

Goldman Sachs released a research report stating that several Macau gaming stocks are about to announce their fourth quarter 2025 results. Investors are expected to focus on the company's profit trends, as different companies have expressed concerns about additional expenses from the November National Games and fierce competition. The bank expects industry EBITDA to increase by 4% and 13% quarter-on-quarter and year-on-year respectively, compared to total gaming revenue which is expected to increase by 6% and 14% quarter-on-quarter and year-on-year respectively, due to increased operating expenses and a shift in the proportion of gaming revenue towards the lower profit VIP room business. In the fourth quarter of last year, Goldman Sachs forecasts that GALAXY ENT (00027) EBITDA will increase by 28% quarter-on-quarter to US$550 million, based on higher VIP win rates; MGM CHINA (02282) EBITDA will increase by 8% quarter-on-quarter to US$328 million, due to a steady recovery in gaming revenue. As for Sands China (01928), the bank expects EBITDA to increase by 4% quarter-on-quarter to US$628 million, as the growth in retail revenue is offset by higher operating expenses and promotional costs. Looking ahead to 2026, the bank expects overall gaming revenue to increase by 8% year-on-year, with EBITDA up 10%, resulting in industry EBITDA and recurring free cash flow reaching US$9.1 billion and US$6.4 billion respectively, approaching pre-pandemic levels. The bank believes that current industry valuations are still attractive, reiterating a "buy" rating for Galaxy Entertainment, MGM China, and Sands China.