Melco Resorts & Entertainment: The Worst Is Behind Us

Melco Resorts & Entertainment remains a BUY as World Cup-driven Macau weakness appears priced in and fundamentals should strengthen into August’s peak visitation. MLCO’s 1Q26 Macau EBITDA grew 16% YoY with margins up to 27.4%, outperforming Las Vegas Sands in margin resilience. MLCO trades at 6.5x forward EV/EBITDA, a 17% discount to LVS and 36% below the consumer discretionary sector, with robust forward growth metrics. Upcoming REM hotel opening in 2H26 targets premium customers, positioning MLCO for GGR share gains even if overall market growth slows.

I last wrote on Melco Resorts & Entertainment ( MLCO ) in early May with a BUY rating, and despite the recent weakness in Macau gaming revenues due to the World Cup, MLCO's share price has only fallen 5% since my last.