Melco Resorts & Entertainment enters the second week of June with an awkward divergence: the stock fell 5.5% on Tuesday to $5.62 while its closest gaming peers posted gains, and a fresh analyst downgrade has reset the Street's conviction level just weeks before the next earnings print.
The most consequential move came from CLSA on June 5. Jeffrey Kiang downgraded MLCO to Hold from Outperform — the same analyst who upgraded the stock to Outperform in September 2025, completing a round-trip in roughly nine months. That flip matters because CLSA has been among the more optimistic voices on Macau recovery. The consensus now stands at hold across six analysts, with mean price target around $7.99 — roughly 42% above Tuesday's close. That gap looks wide, but it partly reflects how far the stock has fallen: MLCO is down around 18% year-to-date, and the prior JPMorgan downgrade in January — which cut the target from $11 to $7.70 and the rating from Overweight to Neutral — already anticipated the deterioration. The remaining bulls, including Citi and Susquehanna, have not moved publicly since mid-2025, making their targets feel dated against the current tape.
The broader gaming peer group made MLCO's Tuesday session look worse by comparison. WYNN gained 2.5% on the day and is up nearly 3% on the week. added 1.7% Tuesday. was essentially flat. MLCO dropped 5.5% against that backdrop, which reinforces the pattern flagged in recent notes: investors are rotating toward operators with more diversified revenue bases, while Macau-pure plays like MLCO absorb disproportionate selling when sentiment wobbles.
Positioning tells a notably unbothered story, and that contrast is worth naming. Short interest is only 1.3% of the free float — and falling. It dropped roughly 9% in a single session on June 9, extending a decline that has erased about 14% of short positions over the past month. The borrow market is wide open: availability runs at over 3,200% of short interest, meaning there are vastly more shares available to lend than there are active short positions. Cost to borrow has crept up about 28% over the week to 0.55%, but in absolute terms that remains trivial. There is no short squeeze dynamic here, and no crowding. Options confirm the same picture — the put/call ratio has edged down to 0.47, slightly below its 20-day average of 0.51. Traders are not reaching for downside protection.
The ORTEX short score has also drifted lower all week, sitting at 32.1 on June 9 against readings above 33 earlier in the month. That directional softening is consistent with shorts covering rather than building. Factor scores offer one note of genuine support: EPS surprise ranks in the 89th percentile, and 90-day EPS momentum ranks 84th — suggesting the analyst community has recently been revising estimates upward even as the stock has struggled. The EV/EBITDA multiple at 6.2x has ticked down modestly over 30 days, keeping valuation relatively undemanding.
The next earnings event is scheduled for July 31. The most recent print — April 30 — produced a modest 0.7% one-day decline followed by a 1.8% recovery over five days. That reaction was subdued, and with shorts continuing to cover rather than build ahead of the next release, the July print becomes less about whether bears are positioned for a miss and more about whether the CLSA downgrade marks a broader recalibration in how the Street is reading Macau mass-market momentum.
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