Texas Capital Securities Adjusts Melco Resorts Position on Macau Revenue Trends
Written by Willa Hansen · Oct 17, 2026
Texas Capital Securities Adjusts Melco Resorts Position on Macau Revenue Trends
Texas Capital Securities has revised its recommendation on Melco Resorts & Entertainment from Buy to Hold while lowering the price target from $8 to $5.50, and this move centers on several measurable factors tied to operations in Macau. The adjustment reflects September gross gaming revenue figures that registered as the weakest monthly result since January 2025, combined with differences between the firm’s EBITDA projections and broader consensus estimates. Observers note that prolonged deflationary conditions in China and the introduction of a 20 percent tax on offshore trust assets have added measurable pressure to the operating environment for companies like Melco Resorts.
Details of the Rating Change
Analysts at Texas Capital Securities outlined the downgrade in a report released during October 2026, and the firm highlighted specific variances in expected earnings before interest, taxes, depreciation, and amortization against prevailing market forecasts. Those variances contributed directly to the decision to shift the rating and reduce the target price, while shares of Melco Resorts responded with immediate declines on the NASDAQ exchange. Data from the report shows that the new $5.50 target incorporates updated assumptions about revenue recovery timelines in the Macau market, where operators continue to navigate post-pandemic patterns alongside regional economic shifts.
Macau Gross Gaming Revenue Performance
September 2026 gross gaming revenue numbers for Macau properties operated by Melco Resorts fell below prior monthly benchmarks, marking the softest performance recorded since the start of the year. Industry tracking organizations reported that total GGR across the region reflected slower visitor volumes and reduced spending per patron compared with earlier quarters in 2025. This latest data point aligned with broader patterns of uneven recovery that have characterized the market since the full reopening of travel corridors between mainland China and the special administrative region.
Contributing Economic Factors
Prolonged deflationary pressures in China have influenced consumer spending behavior, particularly among high-end segments that historically drive premium table play at Macau properties. Economic indicators released by Chinese statistical agencies during 2026 showed sustained price declines across multiple sectors, which in turn affected discretionary travel and entertainment budgets. At the same time, the new 20 percent tax on offshore trust assets has introduced an additional layer of consideration for wealth planning among Chinese nationals, and this policy change took effect earlier in the year with direct implications for capital flows that sometimes support gaming activity. Researchers tracking cross-border financial movements have documented measurable shifts in asset allocation patterns following the tax implementation.
Market Response and Share Movement
Following the announcement from Texas Capital Securities, shares of Melco Resorts declined during the subsequent trading session on the NASDAQ, and volume increased as market participants digested the updated price target. Trading data indicated that the stock moved lower in line with the revised $5.50 valuation, reflecting the combined weight of the GGR shortfall, EBITDA variance, and macroeconomic headwinds cited in the report. Market participants who follow Macau-exposed equities have observed similar sensitivity to regional revenue reports in prior quarters, particularly when monthly figures deviate from consensus expectations.
Context Within Regional Operations
Melco Resorts maintains multiple integrated resort properties in Macau, including City of Dreams and Altira, and these assets account for the majority of the company’s regional revenue exposure. Performance metrics from these properties feed directly into consolidated EBITDA figures that Texas Capital Securities compared against street estimates. The downgrade therefore incorporates both property-level revenue trends and the broader corporate financial outlook, while the 20 percent offshore trust tax adds a structural consideration for future capital allocation decisions by high-net-worth visitors from mainland China. Government reports from Macau’s gaming inspection and coordination bureau have continued to publish monthly GGR breakdowns that allow direct comparison across operators and time periods.
Conclusion
The Texas Capital Securities adjustment provides a consolidated view of near-term challenges facing Melco Resorts, and it incorporates both company-specific forecast differences and wider regional economic conditions. September GGR weakness, the EBITDA variance, deflationary trends in China, and the new tax on offshore trusts form the core elements cited in the report. Shares responded promptly to the revised rating and price target during October 2026 trading, consistent with patterns seen when analysts update Macau-focused coverage. Additional details appear in the original research note available through news.worldcasinodirectory.com and the analysis published at sccgmanagement.com.