Recovery in earnings key debate for NZ's SkyCity, says Macquarie

Skycity Entertainment

31/03/2025 03:55

** Shares of SkyCity Entertainment Group SKC.NZ flat after falling as much as 2.4% to NZ$1.21 in early trade

** Macquarie says key debate on New Zealand-based casino group is whether earnings can start to recover, and there is a lot to suggest that FY25 is "rock-bottom"

** SkyCity said last month that the co expects challenging economic conditions to continue to impact discretionary spending into calendar year 2025

** Brokerage retains "overweight" rating but marginally cuts target price by 3%

** Also trims EBITDA outlook by 0%, 4% and 0% for fiscals 2025, 2026 and 2027, respectively

** Macquarie says SkyCity could generate more than NZ$30 million ($17.13 million) in online gaming EBITDA from FY28 onwards, provided co successfully acquires a licence

** Investors willing to look through the near term should be rewarded - Macquarie

** Three analysts rate the stock "buy," one "hold" and two "sell;" their median PT is NZ$1.5 – LSEG data

** Stock down 14.5% YTD, including current session's moves

($1 = 1.7510 New Zealand dollars)

 (Reporting by Nikita Maria Jino in Bengaluru)

 ((Nikita.Jino@thomsonreuters.com;))