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Wynn Resorts Ltd - Stock Quote WYNN

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Lowering Our Near-Term Macao Gaming Forecast Amid China’s Enduring Stringent COVID-19 Policy

Dan Wasiolek Senior Equity Analyst

Analyst Note

| Dan Wasiolek |

We are reducing our 2022 and 2023 Macao industry gross gaming sales forecasts to mid-20% and 60% of 2019 levels, respectively, down from 40% and 70% prior, as China’s zero-tolerance COVID-19 policy looks to endure beyond our prior expectation of mid-2022. We are removing the 0.5% China country risk premium in our Las Vegas Sands and Wynn models and instead reflecting the near-term COVID-19 and structural Macao government oversight through our uncertainty rating, which now moves to very high from high on these two operators. Our reduced 2022-23 industry forecast lowers our respective fair value estimates on Las Vegas Sands (Macao 66% of estimated 2024 EBITDA), Wynn (53%), and MGM (13%) to $50, $104, and $47, from $52, $105, and $47.50. While shares of these companies trade at a discount to our intrinsic values, we expect their price movements to remain volatile in the near term.

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Wynn Resorts Ltd's Company Profile

Business Description

Wynn Resorts operates luxury casinos and resorts. The company was founded in 2002 by Steve Wynn, the former CEO. The company operates four megaresorts: Wynn Macau and Encore in Macao and Wynn Las Vegas and Encore in Las Vegas. Cotai Palace opened in August 2016 in Macao, Encore Boston Harbor in Massachusetts opened June 2019. Additionally, we expect the company to begin construction on a new building next to its existing Macao Palace resort in 2022, which we forecast to open in 2025. The company also operates Wynn Interactive, a digital sports betting and iGaming platform. The company received 76% and 24% of its 2019 prepandemic EBITDA from Macao and Las Vegas, respectively.

3131 Las Vegas Boulevard South
Las Vegas, NV, 89109
T +1 702 770-7555
Sector Consumer Cyclical
Industry Resorts & Casinos
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2022
Stock Type Distressed
Employees 26,950

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