Analysts Question The Accuracy Of Weekly Macau Estimates

Casino stocks traded lower Monday morning after another disappointing monthly revenue number from Macau. After gaming revenue numbers caught analysts by surprise for a second consecutive month, some are questioning the reliability of Macau’s weekly revenue channel checks.

Weekly Data Unreliable?

The Macau gaming industry provides analysts with unofficial weekly estimates of gaming revenue ahead of the official monthly numbers that are reported by the gaming regulator on the first of each month. According to GGRAsia, some financial firms are no longer using the weekly data because they do not want to expose themselves to potential litigation if the numbers are not accurate.

“In hindsight, we can’t help but question the credibility of [the] weekly data,” JPMorgan analyst Sean Zhuang told GGRAsia Monday.

“The miss was partly driven by elevated estimates, as the Street had hastily revised up numbers during the month (from 13 percent to 15 percent to 18 percent), reflecting upbeat channel checks from industry consultants,” Zhuang told the publication. 

Analysts at Bernstein and Deutsche Bank also blamed bad channel check data for the monthly miss.

What It Means For Investors

Transparency is always good for the stock market, and Macau casino investors are among the few shareholders who have historically received weekly updates on business. If those weekly updates are inaccurate, they may be doing more harm than good for casino stocks.

Las Vegas Sands Corp. LVS and Wynn Resorts, Limited WYNN, the two American companies with the largest exposure to the Macau market, were lower by 6.43 and 7.86 percent, respectively, at the time of publication Monday.

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