Nomura estimates that the total VIP gaming revenue (GGR) at Macau casinos will fall from 6% to 10% in June compared with a year ago. The forecast is based on market research and a difficult comparison of VIP win rates.
"The World Cup begins in mid-June and major football championships have historically been shown to affect monthly VIP rolls, which may limit the possibility of upside surprises," analysts Louise Cheng and Harry Curtis added in a note released on Monday.
The Japanese brokerage said the popular market GGR "remains strong" and could rise to 38% from 34% in June.
Nomura reported that the average daily vote share for the first eight days of June was $973 million ($121.9 million) compared to May's 973 million MOPs, which included the Labor Day holiday period. The company estimated that the June GGR could be in the range of MOP 29 billion to 30 billion, up 3% to 7% from a year earlier.
Cheng and Curtis, in particular, noted that there is no near-term catalyst to boost shares of Macau-related gaming stocks, which have been falling for much of the year so far this month. "We believe a potential sustainable rally may not occur until the end of the third quarter," they wrote.
Morgan Stanley said the Macau casino division may see a quarterly decline in earnings before interest, taxation, depreciation and amortization (EBITDA) for the quarter. This was the first time since the fourth quarter of 2009, it said in a note published Monday.
Morgan Stanley expects EBITDA in the sector to decline 4% quarter-on-quarter for the three months ended June 31. However, EBITDA will still be up 21% year-on-year.
Several analysts are lowering their 2014 forecasts for the Macau casino industry and revising their ratings and price targets for shares in Macau-related gaming companies.
Deutsche Bank on Monday cut its full-year growth estimate for urban casino GGR to 12% from 15%. It also cut Win Macau and SJM Holdings to "hold" from "buy" and cut stock price targets for several Macau-based casino operators.
U.S.-based Telsey Advisory Group LLC said on Monday it was taking a more neutral short-term outlook for Macau. "The underlying long-term growth story remains the same," the brokerage said, but noted that VIP headwinds are likely to last into the third quarter of the year.
"Junkets' ability to recycle capital has slowed, resulting in essentially less than once a month. We attribute this to junket integration within the industry, as well as slower collection periods for junkets overall and increased capital controls by junkets," Telsey wrote.
"Concerns about the Chinese economy are also likely to be the driving force behind this slowdown," it added.
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