By Ying Xian Wong
Genting Singapore shares fell early Friday after the casino operator posted a 63% drop in third-quarter net profit.
Shares fell as much as 7.7% and were recently 5.4% lower at 79.5 Singapore cents, equivalent to US$0.60, bringing its year-to-date losses to over 20%.
Genting Singapore said late Thursday that its third-quarter net profit was 79.4 million Singapore dollars, compared with 216.3 million Singapore dollars a year ago. The sharply lower net profit was because it earned less from VIP bets. Quarterly revenue was 19% lower at 561.9 million Singapore dollars.
Hong Leong Investment Bank cut Genting Singapore stock's target price to 1.22 Singapore dollars from 1.45 Singapore dollars, due to its weaker quarterly profit. The bank also slashes its 2024 to 2026 earnings forecasts by 26%, 24% and 24% respectively.
However, Genting Singapore is likely to stay on a recovery path and could deliver a stronger performance in 2025, Hong Leong analyst Chee Kok Siang said in a note. This outlook is supported by improved global flight connectivity and capacity, along with new attractions at Resorts World Sentosa set to launch in early 2025, he added.
Hong Leong kept a buy rating on the stock.
Maybank Investment Bank also cut its target price on Genting Singapore, lowering it to 1.01 Singapore dollars from 1.10 Singapore dollars following the earnings miss. It also downgraded 2024 to 2026 core net profit forecasts by 16% to 17%.
Still, Maybank IB continues to view the stock as a buy, saying it looks undervalued.
The company's investments in expanding and transforming Resorts World Sentosa are expected to boost its long-term appeal and earnings, Maybank analyst Yin Shao Yang said in a note. He also anticipates that Genting Singapore will participate in a joint bid for a casino license in Thailand next year that could be another earnings tailwind.
Write to Ying Xian Wong at yingxian.wong@wsj.com
(END) Dow Jones Newswires
November 07, 2024 21:15 ET (02:15 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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