JP Morgan Puzzled by Sudden Sell-Off in Sands China and Melco Shares

Investment bank JP Morgan has expressed surprise over the unexpected share price declines seen in Sands China and Melco Resorts & Entertainment, noting that the sell-off does not appear to be supported by any clear deterioration in fundamentals. In a recent research note, analysts said they were “baffled” by the sharp pullback, particularly as both operators continue to demonstrate stable operational trends within Macau’s recovering gaming market.

According to JP Morgan, there was no obvious negative catalyst tied to earnings revisions, regulatory developments, or macro indicators that would justify the magnitude of the drop. The bank highlighted that recent sector data, including gross gaming revenue trends and visitation flows, has remained broadly in line with expectations, making the sudden weakness in Sands China and Melco shares difficult to explain from a valuation or earnings perspective.

Some market commentators have suggested that the decline may be driven by broader market technical factors, such as profit-taking, fund rebalancing at the start of the year, or rotation out of consumer and gaming names amid global equity volatility. Others have pointed to lingering investor sensitivity around operating costs, promotional spending and margin sustainability, even though no new adverse information specific to Sands China or Melco has emerged.

Looking ahead, JP Morgan maintained that the recent share price movement appears disconnected from underlying business performance, and reiterated that Macau’s medium-term recovery story remains intact. Other analysts from regional brokerages have echoed this view, suggesting that unless new negative developments surface, the pullback could present a selective buying opportunity for investors with a longer-term outlook on Macau’s premium-mass and entertainment-led growth trajectory.