SJM Earnings: GLP's Adjusted EBITDA Reached Break-Even, but Market Share Still Lagged Expectations

SJM’s fourth-quarter results were in line with our expectations and adjusted EBITDA at its new property Grand Lisboa Palace reached the break-even level for the first time since its launch in July 2021. Nevertheless, the ramp-up of GLP remains slow, with market share in gross gaming revenue staying flat at 1.7% from a quarter ago, trailing its midterm target of 3%-5% by 2025-26. We believe the firm's new initiatives to create a centralized platform to increase connectivity between its properties, build direct VIP contacts, and expand the marketing team, as well as adopt smart radio frequency identification gaming tables, will help improve operating efficiency and accelerate sales growth at GLP. However, all these will take time to bear fruit and near-term visibility of market share gain remains low amid intense competition, in our view.