Melco Resorts Earnings: Results in Line; Resumption of Dividend Expected in Second Half of 2025

Narrow-moat Melco Resorts’ third-quarter results were largely in line with our and the market expectations, with luck-adjusted EBITDA of USD 296 million compared with Bloomberg consensus of USD 292 million. Management indicated strong performance in October's golden week, with mass drop volume more than 20% above its 2019 level. The firm also aims to resume its dividend program in the second half of 2025. We expect the firm’s strength in the premium mass segment, its leadership in product innovation, and its continued ramp-up at Studio City phase 2 should continue to drive solid earnings growth in the mid-to-long term. We maintain our earnings forecasts and fair value estimate of USD 10.80 per share, and we think the shares are currently undervalued.