Melco Resorts & Entertainment faces its August 13 earnings release with a wall of analyst target reductions behind it and a stock trading nearly 30% below consensus fair value.
The analyst story heading into this print is one of persistent, broad-based trimming. Susquehanna cut its target from $12 to $8 yesterday — still a Positive rating, but a 33% reduction that signals waning confidence in the pace of Macau's recovery. That follows JP Morgan trimming to $5.70 last month and Citigroup cutting to $9.40 in early July. Morgan Stanley downgraded to Equal-Weight in late June. The direction of travel is clear: bulls remain on the register, with seven buy ratings and a consensus mean target of $7.59 against a current price of $5.52, but nearly every major firm has lowered its target in 2026. The gap between where the stock trades and where analysts think it should trade is wide — but it has been getting narrower from the wrong direction.
Options positioning has eased since yesterday's article noted a more defensive tilt. The put/call ratio has actually pulled back to 0.28, slightly below its 20-day mean of 0.29 — a marginally call-skewed reading that sits near the lower end of the past year's range (52-week low: 0.20). That is a notable shift from the elevated defensive posture flagged on August 12. Short interest remains a non-event at just 1.1% of the free float, down roughly 20% over the past month, and borrow availability remains extraordinarily loose at over 4,400% — confirming that bearish conviction in the lending market is minimal. Peers and have both outperformed MLCO this week, with Wynn up 7.4% and LVS roughly flat, sharpening the relative underperformance narrative.
The company has a habit of falling modestly on the day of results — both the April print and the August 7 event produced small negative moves — but recovering over the following week. The EPS surprise factor score ranks in the 92nd percentile, meaning MLCO has historically beaten estimates at a high rate. That track record sets up an interesting tension: the company tends to beat, but the stock tends to dip on the day regardless, and analysts keep lowering the bar.
Today's print is ultimately a test of whether Macau premium mass revenue is recovering fast enough to justify the gap between a $5.52 stock price and a Street that, even after months of target cuts, still sees nearly 40% upside.
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