Melco Resorts & Entertainment has been upgraded by analysts at Credit Suisse Group to an “outperform” rating in its recent research report.

The ratings group noted that the summer holidays and Chinese policy changes stand out as “positive catalysts”.

Credit Suisse analyst Kenneth Fong also pointed out that a better-than-expected recovery in 1Q23, as well as a supportive government in Macau, should support shares.

In addition, the company’s performance so far in 2023 has been successful, helped by its launch of non-gaming events and offerings, boosting confidence in a future recovery.

“We like MLCO’s quality non-gaming assets, proven by its recent successful launch of non-gaming events, which should offer the most positive earnings surprise in 2Q23,” Fong said.

“This should also benefit the company from a mass-driven recovery ahead, while the sustainability of the ability to attract new players remains to be seen,” notes the analyst.

The summer holidays, policy stimulus, and Q2 earnings were all mentioned as possible drivers of share price gains. 

In mid-May, Melco Resorts CEO, Lawrence Ho, said that the recovery in Macau so far “has exceeded all of our expectations”, as Melco narrowed its loss significantly to $81.28 million and recorded adjusted property EBITDA of $190.8 million – up nearly four-fold yearly.

Melco’s 1Q23 results also showed that total operating revenues increased 51 percent yearly, to $716.48 million, of which casino revenues totaled $599 million.