The reduction reflects a lack of near-term catalysts for tourism and limited clarity on earnings recovery
[SINGAPORE] Persistent haze and adverse weather conditions are casting a pall over Singapore’s tourism recovery, prompting CGS International (CGSI) to cut its target price on integrated resort operator Genting Singapore while keeping a “hold” call on the stock.
In a research report on Thursday (Oct 22), CGSI analyst Tay Wee Kuang trimmed its target price to S$0.63 from S$0.67, valuing the company at seven times its forecast FY2027 enterprise value-to-Ebitda ratio, down from 7.5 times previously.
The target price reduction reflects a lack of near-term catalysts for Singapore’s tourism sector and limited clarity on earnings recovery, with lingering environmental headwinds expected to keep visitor arrivals subdued into the final quarter of the year.
Data from the Singapore Tourism Board showed international visitor arrivals fell 1.8 per cent year on year in the third quarter of 2026, with September marking six consecutive months of annual decline.
Analyst briefings from peer operator Las Vegas Sands – owner of Marina Bay Sands (MBS) – noted softer VIP volumes in July and September. This coincided with competing World Cup festivities in July and the onset of hazy weather in September.
Tay said more haze from Indonesian hotspots, alongside ongoing El Nino weather conditions, is set to keep visitor numbers subdued through the fourth quarter of 2026. This will likely continue to weigh on Genting Singapore’s non-gaming revenues for the remainder of the year.
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Subdued Q3 results expected
CGSI estimates Genting Singapore will report third-quarter adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) of about S$180 million, representing a 19.2 per cent year-on-year decline and a 14.6 per cent drop quarter on quarter.
The forecast follows weak third-quarter results from MBS. Gross gaming revenue fell 10.3 per cent year on year and 9.1 per cent quarter on quarter to US$1.2 billion due to lower VIP volumes and mass win rates.
MBS’ net gaming revenue slid 14.9 per cent year on year to US$916 million as VIP rolling volumes shrank 7.1 per cent.
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In addition to sector-wide gaming softness, Genting Singapore faced operational disruptions from ongoing asset refresh works. Renovations across its properties – including portions of the gaming floor, Hotel Michael and Crockfords Towers – led to weaker non-gaming performance relative to its peer.
Valuations attractive, catalysts scarce
Genting Singapore currently trades at 6.6 times 12-month forward enterprise value-to-Ebitda, more than one standard deviation below its post-pandemic five-year average.
Despite the attractive valuation, Tay maintained a “hold” call, citing a lack of visibility on earnings growth for FY2027 given the muted Singapore tourism background.
Key upside risks include stronger-than-expected gaming performance that demonstrates sustained market share gains and Ebitda margin expansion through cost controls.
Downside risks include continued drops in visitor arrivals, cost escalations, and operational friction from asset upgrades over the next six to nine months.