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Investing.com - UBS upgraded NagaCorp Ltd (HK:3918) (OTC:NGCRF) from Neutral to Buy on Tuesday, while substantially raising its price target to HK$7.50 from HK$3.80, representing a 97% increase.
The upgrade comes as gaming revenue momentum accelerates in Phnom Penh, driven by increasing business travelers and local demand, according to UBS. The firm expects this growth trend to continue, forecasting gross gaming revenue to increase by 32% year-over-year in 2025 and 10% in 2026.
UBS cited Cambodia’s robust pipeline of infrastructure projects, which should attract continued foreign direct investment, bringing more business travelers and expatriates to the country and sustaining gaming demand growth.
Despite NagaCorp shares rallying approximately 60% since early April, UBS believes the market has not fully priced in the company’s growth trajectory. The stock currently trades at approximately 5.2 times 2026 estimated EV/EBITDA, which is about one standard deviation below its pre-Covid average.
UBS also noted that downside risk to the share price should be limited by an expected 2026 dividend yield of approximately 5%, as the company gradually increases its dividend per share payout during its recovery.
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