Macquarie has updated its 12-month target for SkyCity Entertainment Group Ltd (ASX: SKC).
SkyCity Entertainment is a New Zealand-based company that engages in operating entertainment casino complexes in New Zealand and Australia.
It's important to note that its primary reporting currency is NZD.
When issuing target prices, analysts usually use the company's base currency for consistency with its financial reporting, earnings, and valuation models.
Therefore Macquarie – for accuracy – lists its target price at NZ$1.45.
At the time of writing, it is trading at $1.04 NZD
This insinuates an upside of 39.4%.
What did Macquarie have to say about SkyCity Entertainment?
On the ASX, SkyCity Entertainment shares are down almost 30% since the start of 2025.
However, Macquarie believes it could be a buy-low option.
SkyCity CEO Jason Walbridge presented at the 2025 Macquarie Australia Conference, and a trading update was also provided.
According to a report from Macquarie, the key debate on SkyCity is whether earnings can stabilise around current levels, noting medium-term catalysts including NZICC/online.
We see medium-term earnings catalysts skewed to the upside vs downside, and covenant headroom, despite increasing leverage.
We expect SkyCity to participate in online gaming, which it should launch in 2H 2026. The current grey market size is around NZ$700m (likely understated), and assuming 20% market share at a 20-25% margin implies NZ$28-35m annual EBITDA
What are other brokers saying?
Currently, the penny stock is trading at $0.97 a share on the ASX.
The share price hit a 52-week low on Tuesday on the back of downgraded FY 2025 earnings guidance.
Penny stocks can be popular with investors willing to take on extra risk for potential additional rewards.
However, penny stocks may also come with increased volatility.
Bell Potter has a target price of $1.14 AUD, which indicates an approximate upside of 17.5%.
TradingView has a 12-month target price of $1.23, and SelfWealth online brokerage platform has a target price of $1.18.
It seems brokers are optimistic about a rebound for the casino and resorts stock. However due to the volatility of penny stocks, buyers should be aware there could be more pain in the short term.
