Analysts Expect Upside in Melco Resorts (MLCO) Despite Gaming Revenue Growth Slowdown

Company Overview - Melco Resorts & Entertainment Limited (NASDAQ:MLCO) is a developer, owner, and operator of casino gaming and resort facilities in Europe and Asia, including the City of Dreams and various leisure facilities [4] Investment Ratings and Price Targets - Texas Capital initiated coverage of Melco Resorts with a Buy rating and a price target of $11.5, citing the company's unique non-gaming offerings as a growth driver, with Macau's gross gaming revenue nearing 2019 levels [1] - JPMorgan downgraded the stock from Overweight to Hold on January 15, lowering the price target from $11 to $7.7, indicating a potential upside of 25.61% from current levels, while expressing concerns over downside risks to consensus estimates and lack of dividend support [2] - Bank of America analyst Karl Choi reduced the price target from $9.5 to $7.9 on January 13, maintaining a Hold rating, with the new target suggesting a 28.87% upside, reflecting a selective view on Macau gaming stocks ahead of a projected slowdown in gross gaming revenue growth in 2026 [3] Market Context - Analysts are taking a more selective approach to Macau gaming stocks, indicating a cautious outlook for the sector [2][3] - The company's margins show clear and sustained improvement, but it remains in 'show-me' territory for investors, suggesting that further validation of its growth story is needed [2]