With China loosening its COVID precautions, Macau will be able to allow tour groups, sending gambling stocks higher on Monday.
JOSH SCHAFER: So my plays are the Macau kind of gambling stocks, Wynn Resorts and Las Vegas Sands. The two companies soaring today, up about 12% each, after China has erased its COVID-19 precautions. So Macau is going to be welcoming back tour groups for the first time in nearly three years. And it's also reintroducing an e-visa program that could triple visitation numbers from their August lows.
So those customers, which are known as individual visit scheme gamblers, are among the most valuable in Macau, according to David Katz and Jefferies. Katz and Jefferies upgraded both Wynn and Las Vegas today from hold to buy on the news, highlighting potential growth of 90% for revenues at Las Vegas Sands in 2023.
And the positive news, guys, really comes after what's been not so great of a year for these two names. Las Vegas Sands just barely above positive on the year after today's positive move, but Wynn still down over 20% on the year to date, Rachelle. I don't know what you make of this move, Rachelle. It seems like there probably should be guaranteed new people coming back here because they haven't been allowed in, so maybe a little bit different than Planet Fitness when we talk about the return from COVID.
RACHELLE AKUFFO: For sure. I mean, a lot of people are optimistic. They keep saying when China fully reopens and when-- that's going to lead to a lot more traffic into things like Macau and other gambling hubs and things like that. But it's one of those things where it's a big if. Obviously, the pandemic is not over for everybody.
And so a lot of people are wondering, is this going to be like a stop and start? Can we really guarantee, as you said, if you don't have these people guaranteed to come back, have they perhaps gone to other locations? Have they sought other places to gamble? You have, obviously, the rise of online betting. Do you still want people coming in those same big droves, coming to these casinos?
But it's a positive start. And certainly, these casino stocks could use the boost. So hopefully, it pans out for them, and the COVID numbers stay low because that's really going to be the key to success here for Macau.
SEANA SMITH: Yeah, and Josh, you mentioned that bullish note there from Jefferies. Also JP Morgan analyst there, Joseph Greff, he was out with a note saying that this news is, quote, "the first meaningful travel policy enhancing action since the COVID-19 outbreak." And he was actually saying that Las Vegas Sands, in his view, was best positioned here because it benefits from the return of international visitors in Singapore, as well as Macau. So it will be interesting to see in terms of the number of visitors and how quickly people are willing to return.