UBS Upgrades Melco Resorts & Entertainment (MLCO) to Buy From Neutral – Here’s Why

Melco Resorts & Entertainment Limited (NASDAQ:MLCO) is one of the most undervalued hotel stocks to invest in now. Melco Resorts & Entertainment Limited (NASDAQ:MLCO) was upgraded to Buy from Neutral by UBS on February 16, with the firm adjusting the price target on the stock to $9.50 from $9.80. It told investors in a research note that shares were down 27% year-to-date, likely due to concerns regarding margin pressure, trademark license fee hike, and market share losses.

Melco Resorts (MLCO) Rallies 11.5% on Higher Price Target, Rosy Macau Gaming

Going forward, the firm believes that Melco Resorts & Entertainment Limited’s (NASDAQ:MLCO) asset enhancements at City of Dreams in Macau should allow it to largely offset margin pressures and higher branding fees in 2026. UBS contended that the shares are trading at an attractive valuation, and that it sees the company posting “robust” free cash flow in 2026 and 2027 as its capital expenditures ease.

Melco Resorts & Entertainment Limited (NASDAQ:MLCO) also received a rating update from Citi on February 12. The firm cut the price target on the stock to $10.50 from $12, maintaining a Buy rating on the shares.

Melco Resorts & Entertainment Limited (NASDAQ:MLCO) develops and operates resort facilities, hotels, and casinos in the Philippines and Macau. The company’s three Macau casinos include City of Dreams, Studio City, and Altira Macau.

While we acknowledge the risk and potential of MLCO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MLCO and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 15 Stocks That Will Make You Rich in 10 Years AND 12 Best Stocks That Will Always Grow.

Disclosure: None. Follow Insider Monkey on Google News.