Key Takeaways
Galaxy Entertainment Group’s stock rose as much as 3% after Goldman Sachs reiterated its Buy rating on the casino operator, citing a solid dividend outlook following its first-quarter results.
"Management repeatedly expressed confidence during the conference call in maintaining dividend distribution," Goldman Sachs said in a report on May 13. The bank views Galaxy’s balance sheet as sufficient to support an interim dividend of at least $0.80 per share, implying a yield of about 5 percent.
The bullish analyst call followed Galaxy’s first-quarter earnings, where normalized adjusted EBITDA grew 21 percent year-over-year to $3.6 billion, in line with expectations. Shares in Galaxy Entertainment (00027.HK) finished the session at HK$33.30, up 2.97 percent after touching an intraday high of HK$33.36.
The stock’s gain marks a reversal after a period of weakness. It had fallen 1.34 percent on May 12 to close at HK$32.34 and was down more than 26 percent over the three months prior, with technical indicators showing the stock in oversold territory ahead of the earnings release.
For the first quarter ended March 31, Galaxy Entertainment reported net revenue of $12.4 billion, an 11 percent increase from the prior year. The growth was supported by a 14 percent year-over-year rise in visitor arrivals to Macau, which reached 11.2 million during the quarter.
While reported adjusted EBITDA of $3.6 billion was down 17 percent from the fourth quarter of 2025, the company noted the comparison was skewed by luck. The previous quarter included approximately $730 million of favorable luck, whereas the first quarter recorded around $2 million of unfavorable luck. After adjusting for this, EBITDA was flat quarter-on-quarter.
Galaxy Entertainment continues to invest in non-gaming attractions to diversify its revenue. The company hosted over 80 concerts, sporting events, and shows in the first quarter. Management highlighted the successful ramp-up of its new luxury hotel, Capella at Galaxy Macau, which opened in February 2026, and the expansion of its premium gaming area.
The company’s balance sheet remains strong, with $39.2 billion in cash and liquid investments and a net cash position of $36.5 billion as of March 31. This financial strength underpins the dividend outlook and allows for continued investment in its Phase 4 development, a 600,000 square meter expansion targeted for completion in 2027.
The renewed confidence from analysts suggests the market is looking past short-term volatility and focusing on the company's solid cash flow and commitment to shareholder returns. Investors will next watch for the company's second-quarter results and any updates on the Macau market's recovery trajectory.
This article is for informational purposes only and does not constitute investment advice.
