CLSA slashes price target on Melco Resorts & Entertainment Limited [MLCO] – find out why.

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Melco Resorts & Entertainment Limited [NASDAQ: MLCO] plunged by -$0.47 during the normal trading session on Wednesday and reaching a high of $5.90 during the day while it closed the day at $5.42. The company report on June 23, 2022 that Studio City International Holdings Limited Announces Extension of Gaming Concessions in Macau to December 31, 2022.


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Studio City International Holdings Limited (NYSE: MSC) (“Studio City” or the “Company”), a world-class integrated resort located in Cotai, Macau, today announces that Melco Resorts (Macau) Limited, a subsidiary of Melco Resorts & Entertainment Limited and the operator of the Studio City Casino (“Gaming Operator”), entered into an amendment agreement to its subconcession contract pursuant to which the Gaming Operator’s subconcession, which is due to expire on June 26, 2022, was extended to December 31, 2022 which coincides with the extended expiration date of all the other concessions and subconcessions in Macau. In addition, on June 23, 2022, the Gaming Operator and Studio City Developments Limited, the subsidiary of the Company holding the land lease rights for the property on which Studio City Casino is located (“Studio City Developments”), executed an undertaking in favor of the Macau government pursuant to which the Gaming Operator and Studio City Developments committed to sign the documents required by the Macau government so that the gaming areas and gaming support areas of the Studio City Casino, in accordance with Macau law, reverts to the Macau SAR, without compensation and free and clear from any charges or encumbrances at the expiration of the Gaming Operator’s subconcession. The final terms of such reversion are subject to the execution of a reversion deed or similar instrument in favor of the Macau government. The Gaming Operator and Studio City Entertainment Limited, a subsidiary of the Company, have also amended the agreement under which the Gaming Operator operates the Studio City Casino to align such agreement with the newly enacted amendments to the gaming law in Macau. In addition, certain conditions imposed by the Macau government relating to the previously existing agreement, including in relation to shareholding requirements for certain direct and indirect shareholders of Studio City Entertainment Limited, are no longer applicable.

Melco Resorts & Entertainment Limited stock has also loss -12.16% of its value over the past 7 days. However, MLCO stock has declined by -34.06% in the 3 months of the year. Over the past six months meanwhile, it has lost -49.49% and lost -46.76% year-on date.

The market cap for MLCO stock reached $2.47 billion, with 474.06 million shares outstanding and 460.10 million shares in the current float. Compared to the average trading volume of 4.80M shares, MLCO reached a trading volume of 4119955 in the most recent trading day, which is why market watchdogs consider the stock to be active.

Here’s what leading stock market gurus have to say about Melco Resorts & Entertainment Limited [MLCO]:

CLSA have made an estimate for Melco Resorts & Entertainment Limited shares, keeping their opinion on the stock as Buy, with their previous recommendation back on May 06, 2022. The new note on the price target was released on December 14, 2021, representing the official price target for Melco Resorts & Entertainment Limited stock. Previously, the target price had yet another raise to $10, while JP Morgan analysts kept a Neutral rating on MLCO stock.

The Average True Range (ATR) for Melco Resorts & Entertainment Limited is set at 0.42, with the Price to Sales ratio for MLCO stock in the period of the last 12 months amounting to 1.26. The Price to Book ratio for the last quarter was 108.40.

MLCO stock trade performance evaluation

Melco Resorts & Entertainment Limited [MLCO] fell into the red zone at the end of the last week, falling into a negative trend and dropping by -12.16. With this latest performance, MLCO shares dropped by -0.73% in over the last four-week period, additionally sinking by -49.49% over the last 6 months – not to mention a drop of -67.15% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for MLCO stock in for the last two-week period is set at 44.99, with the RSI for the last a single of trading hit 41.57, and the three-weeks RSI is set at 45.79 for Melco Resorts & Entertainment Limited [MLCO]. The present Moving Average for the last 50 days of trading for this stock 5.53, while it was recorded at 5.85 for the last single week of trading, and 8.75 for the last 200 days.

Melco Resorts & Entertainment Limited [MLCO]: An insightful look at the core fundamentals

Operating Margin for any stock indicates how profitable investing would be, and Melco Resorts & Entertainment Limited [MLCO] shares currently have an operating margin of -26.97 and a Gross Margin at -1.81. Melco Resorts & Entertainment Limited’s Net Margin is presently recorded at -40.34.

Return on Equity for this stock declined to -120.54, with Return on Assets sitting at -9.07.

Melco Resorts & Entertainment Limited’s liquidity data is similarly interesting compelling, with a Quick Ratio of 2.40 and a Current Ratio set at 2.40.

Earnings per share (EPS) analysis for Melco Resorts & Entertainment Limited [MLCO] stock

The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for MLCO. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for Melco Resorts & Entertainment Limited go to 8.00%.

Melco Resorts & Entertainment Limited [MLCO]: Insider Ownership positions

There are presently around $1,065 million, or 41.60% of MLCO stock, in the hands of institutional investors. The top three institutional holders of MLCO stocks are: ARGA INVESTMENT MANAGEMENT, LP with ownership of 21,304,591, which is approximately 23.577% of the company’s market cap and around 33.50% of the total institutional ownership; HARDMAN JOHNSTON GLOBAL ADVISORS LLC, holding 20,992,779 shares of the stock with an approximate value of $123.65 million in MLCO stocks shares; and CAPITAL WORLD INVESTORS, currently with $123.15 million in MLCO stock with ownership of nearly -5.352% of the company’s market capitalization.

Positions in Melco Resorts & Entertainment Limited stocks held by institutional investors increased at the end of July and at the time of the July reporting period, where 116 institutional holders increased their position in Melco Resorts & Entertainment Limited [NASDAQ:MLCO] by around 21,094,348 shares. Additionally, 122 investors decreased positions by around 24,370,712 shares, while 41 investors held positions by with 135,309,052 shares. The mentioned changes placed institutional holdings at 180,774,112 shares, according to the latest SEC report filing. MLCO stock had 37 new institutional investments in for a total of 7,735,775 shares, while 38 institutional investors sold positions of 1,845,692 shares during the same period.

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