Melco Resorts & Entertainment Limited Just Beat EPS By 7.6%: Here's What Analysts Think Will Happen Next

It's been a sad week for Melco Resorts & Entertainment Limited (NASDAQ:MLCO), who've watched their investment drop 12% to US$5.53 in the week since the company reported its yearly result. The result was positive overall - although revenues of US$5.2b were in line with what the analysts predicted, Melco Resorts & Entertainment surprised by delivering a statutory profit of US$0.46 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Melco Resorts & Entertainment after the latest results.

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After the latest results, the 13 analysts covering Melco Resorts & Entertainment are now predicting revenues of US$5.32b in 2026. If met, this would reflect a modest 3.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to climb 17% to US$0.56. Before this earnings report, the analysts had been forecasting revenues of US$5.28b and earnings per share (EPS) of US$0.69 in 2026. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

Check out our latest analysis for Melco Resorts & Entertainment

It might be a surprise to learn that the consensus price target fell 5.4% to US$9.73, with the analysts clearly linking lower forecast earnings to the performance of the stock price. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Melco Resorts & Entertainment analyst has a price target of US$12.30 per share, while the most pessimistic values it at US$6.40. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Melco Resorts & Entertainment's revenue growth is expected to slow, with the forecast 3.0% annualised growth rate until the end of 2026 being well below the historical 28% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.4% per year. Factoring in the forecast slowdown in growth, it seems obvious that Melco Resorts & Entertainment is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Melco Resorts & Entertainment going out to 2028, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Melco Resorts & Entertainment that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.