DBS trims target price to S$0.80 as tourism and discretionary spending outlook dims
Genting Singapore, operator of the flagship Resorts World Sentosa (RWS), has received a notable downgrade from DBS Group Research, shifting from a “buy” to a “hold” rating. Alongside the downgrade, DBS analysts revised the stock’s target price downward from S$0.90 to S$0.80, reflecting a cautious outlook on macroeconomic conditions and tourism demand in Southeast Asia.
Tourism Slowdown and Trade Tariffs Dampen Outlook
At the heart of DBS’s revision lies a weakening regional economic picture. New U.S. tariffs of up to 36% on Southeast Asian exports are expected to weigh on local economies and consumer confidence, reducing discretionary spending and tourism—both critical revenue drivers for Genting Singapore.
DBS noted that regional visitors make up the bulk of Genting’s gaming and resort clientele, and these travelers are more prone to tightening entertainment budgets under economic stress. In contrast, Western tourists are less sensitive to regional economic downturns, making the company more vulnerable than peers with diversified tourism bases.
As a result, DBS has lowered its EBITDA forecast for Genting Singapore by 2% for FY2025 and 3% for FY2026, signaling tempered earnings expectations over the near to medium term.
Market Cap and MSCI Index Exclusion Risk
Compounding the pressure is the possibility of Genting Singapore being removed from the MSCI Singapore Index, a benchmark followed by many institutional investors. The company’s market capitalisation has declined to approximately S$4.4 billion, placing it near the lower boundary for index inclusion. Should Genting be dropped from the index, passive fund outflows could further weigh on its share price.
The next MSCI review is scheduled for 7 August 2025, with any rebalancing changes set to take effect on 27 August. Analysts are watching closely, as exclusion could trigger selling pressure from MSCI-linked funds.
Property Expansion Fails to Offset Soft Consumer Sentiment
While Genting Singapore had pinned hopes on property development and RWS enhancements to boost post-pandemic recovery, DBS is less optimistic these initiatives will drive substantial near-term upside. The second half of FY2025 is expected to be more muted, with weak regional tourism and rising operational costs limiting margin expansion.
Notably, shares of Genting Singapore have slipped 3.3% year-to-date, underperforming regional gaming peers. Despite strong fundamentals and a solid balance sheet, the broader macroeconomic headwinds and regulatory overhang make a bullish thesis less compelling in the short run.
Conclusion: Stability Over Aggressive Growth
While Genting Singapore remains a well-established player in the Asian integrated resort landscape, the confluence of softening regional demand, external trade pressures, and MSCI exclusion risk has shifted sentiment. DBS’s downgrade reflects a more balanced risk-reward profile, encouraging investors to wait for clearer signals of consumer recovery and macroeconomic stability before revisiting growth projections.
Until then, investors may find limited upside catalysts in the near term despite long-term potential in Singapore’s robust gaming and tourism framework.
