The shares of Macau casino owners are rising after Barclays upgraded two names in the sector, Las Vegas Sands (LVS) and Wynn Resorts (WYNN), to Overweight from Equal Weight. Macau's momentum is "continuing to build," the firm stated.

PICKING UP STEAM: Noting that Macau's non-VIP gross gaming revenue has risen for four consecutive quarters, Barclays analyst Felicia Hendrix wrote that Macau "has been picking up steam." Macau's gross gaming revenue "is in the early stages of a multi-year growth cycle," the analyst believes. Historical data indicates that Macau stocks should rise much further, she indicated.

LAS VEGAS SANDS: The company should grow for many years to come as Macau fundamentals improve and infrastructure improvements make it easier for people to visit the region, according to Hendrix. Las Vegas Sands' earnings before interest, taxes, depreciation and amortization from Macau probably won't increase significantly until next year, but its Macau EBITDA should rise 6.5% in 2018 and 7.3% in 2019, likely pushing its stock price higher, she believes. The analyst raised her price target on the stock to $68 from $55.

WYNN: The company should gain market share as its new Wynn Palace casino becomes more popular and revenue from all of its new projects raise its cash flow, the analyst stated. Hendrix increased her price target on Wynn Resorts to $144 from $87.

OTHERS TO WATCH: Melco Crown (MLCO) and MGM Resports (MGM) are two other publicly traded Macau casino owners.

PRICE ACTION: In morning trading, Wynn rose 3.5% to $126.50 and Las Vegas Sands advanced 2% to $58.60.