BofA Securities downgrades Bloomberry Resorts stock on growth concerns

BofA Securities downgraded Bloomberry Resorts Corporation (PSE:BLOOM) from Buy to Neutral, significantly lowering its price target to PHP4.30 from PHP9.70, citing low visibility on earnings growth into 2026. The downgrade is driven by slower-than-expected VIP demand recovery from China and Korea, regulatory uncertainty surrounding its online gaming platform, and the plateauing growth of Solaire North, which is also cannibalizing revenue from Solaire Entertainment City.

Analysis

BofA Securities has issued a significant negative revision for Bloomberry Resorts Corporation (PSE:BLOOM), downgrading the stock to Neutral from Buy and slashing the price target by over 55% to PHP4.30 from PHP9.70. The downgrade is underpinned by low visibility into earnings growth for the second half of 2025 and 2026. Key drivers for this pessimistic outlook include a slower-than-anticipated recovery in high-value VIP gaming demand from China and Korea, attributed to weak travel, safety perceptions, and macroeconomic pressures. Internally, the company faces operational challenges as its new Solaire North property, after an initial 21% quarter-over-quarter revenue surge post-launch, has seen growth decelerate sharply to just 2% in the most recent quarter. Critically, this new property appears to be cannibalizing the company's established Solaire Entertainment City, which suffered a 20% quarter-over-quarter and 27% year-over-year decline in gross gaming revenue. Compounding these issues is significant regulatory uncertainty surrounding its nascent online gaming platform, with an unclear launch timeline and a worst-case scenario of a complete ban posing a material risk to a potential future growth avenue.

Key Decisions for Investors

• Given the BofA downgrade and substantial price target reduction, investors should exercise caution and re-evaluate their positions in Bloomberry, considering the heightened risks to the earnings outlook.
• Monitor gross gaming revenue reports closely, specifically looking for evidence that growth at Solaire North is not merely cannibalizing revenue from the flagship Solaire Entertainment City.
• Keep a close watch on regulatory developments regarding the company's online gaming license and shifts in VIP tourist arrivals from China and Korea, as these are the primary catalysts for the revised negative outlook.