We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Wynn Resorts Rides on Macau Revival, Solid Vegas Business
Read MoreHide Full Article
On May 30, we issued an updated research report on leading developer, owner and operator of casino resorts Wynn Resorts, Limited (WYNN - Free Report) .
Last month, the company posted better-than-expected first-quarter 2017 results with both earnings and revenues surpassing the Zacks Consensus Estimate.
In fact, this Zacks Rank #1 (Strong Buy) company’s shares have outperformed the Zacks categorized Gaming industry in the past six months. The stock rallied 26% outpacing the industry’s gain of 5.3%, during the same time period.
Given the improving gaming trends in Macau and continued improvement in Las Vegas business, the stock is expected to perform well in the quarters ahead.
Key Growth Drivers
Macau Recovers: A tough operating environment in Macau weighed on casino stocks from Jun 2014 to most part of 2016.
However, Macau's gambling revenues have been rising since the second half of 2016 with new resorts attracting high rollers as well as leisure gamblers. Also, efforts undertaken by Macau operators to revive revenues by wooing tourists and recreational gamblers with family-friendly resorts and more non-gaming facilities have finally started yielding results. In fact, Macau’s gaming revenues were up in April that marked the ninth consecutive month of gains, thereby signaling that the casino hub is firmly on its path to recovery.
We note that the opening of Wynn Palace (in Aug 2016) was a major reason for the turnaround in gambling revenues in Macau as it attracted visits from tourists and leisure gamblers. Moreover, the resort is poised to fortify the company’s position in the Cotai strip over the long term.
Also, the government of China is considering measures to support Macau’s economy in all aspects and introduce favorable policies, which are expected to improve visitation pattern and boost tourism.
Thus, it seems that the worst is over for Macau as the gambling industry is showing clear signs of stabilization.
Focus on Non-Gaming Revenues: Wynn Resorts generates a solid share of its revenues from Macau resorts. Apart from the gaming business in Macau, the company has been increasingly focusing on boosting non-gaming revenues. Given the decent visitation pattern in Macau, infrastructure development and government’s efforts to boost tourism, non-gaming sources are expected to boost revenues, going forward.
In fact, building resorts in Asia should help the company capitalize on the strong consumer spending trend in the region.
Domestic Market Expansion: In order to boost performance in Las Vegas, the company has remodeled rooms at its properties and the baccarat pit. Its properties in Las Vegas should thus continue to cash in on the favorable trends of improving employment rate and positive tourism numbers in the region. Moreover, Wynn Resorts’ casino resort that is anticipated to open in Massachusetts in 2019, should strengthen its presence in the U.S. market. Moving ahead, the company plans to start building Wynn Paradise Park by year-end, taking over a footprint that includes the Wynn Golf Club comprising restaurants, hotels and other entertainment options.
Our Take
Does this mean that the company has been lying on a bed of roses? Well, not really!
Despite the revival in Macau, concerns related to the sustainability of revenues from the VIP market still linger, suggesting that it will take some time for the region to return to its former glory. In fact, in the first quarter of 2017, Wynn Resorts recorded a decrease of 3.5% in its revenues at Wynn Macau.
Additionally, continual construction around Wynn Resorts has been hampering foot traffic therein of late. Also, the opening of Wynn Resorts is somewhat leading to cannibalization at Wynn Macau.
Also, the latest crackdown on the junket industry by the Macau government as well as efforts to stop money laundering by limiting ATM withdrawals and use of facial recognition technology at ATMs could restrict gaming revenues in the near term.
Meanwhile, Wynn Palace is likely to face extreme peer pressure from several local Chinese casino operators as well as the recently opened The Parisian Macao and the Sands Cotai Central project of Las Vegas Sands Corp. (LVS - Free Report) . Another U.S.-based company, MGM Resorts International’s (MGM - Free Report) $2.9 billion casino hotel is also set to open in Cotai in the fourth quarter of 2017. We believe that these openings might pose a huge threat to the company’s business in the region in the future.
Despite the headwinds, Wynn Resorts is well poised for growth given its solid fundamentals, strong brand recognition, increasing market share, focus on non-gaming revenues and a fairly favorable macro environment.
Notably, the Zacks Consensus Estimate for Wynn Resorts’ current quarter’s earnings has moved up 40%, reflecting four upward revisions versus none downward over the last 60 days. Also, current year’s earnings estimates have inched up 38.7%, on the back of five upward revisions versus no downward revision. All these positive earnings estimate revisions testifies the unwavering confidence that analysts have in the company and further adds to the optimism in the stock.
The Zacks Consensus Estimate for Melco Resorts’ full-year 2017 earnings climbed 43.8% over the last 60 days. Further, for 2017, EPS is expected to increase a solid 82.6%.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Wynn Resorts Rides on Macau Revival, Solid Vegas Business
On May 30, we issued an updated research report on leading developer, owner and operator of casino resorts Wynn Resorts, Limited (WYNN - Free Report) .
Last month, the company posted better-than-expected first-quarter 2017 results with both earnings and revenues surpassing the Zacks Consensus Estimate.
In fact, this Zacks Rank #1 (Strong Buy) company’s shares have outperformed the Zacks categorized Gaming industry in the past six months. The stock rallied 26% outpacing the industry’s gain of 5.3%, during the same time period.
Given the improving gaming trends in Macau and continued improvement in Las Vegas business, the stock is expected to perform well in the quarters ahead.
Key Growth Drivers
Macau Recovers: A tough operating environment in Macau weighed on casino stocks from Jun 2014 to most part of 2016.
However, Macau's gambling revenues have been rising since the second half of 2016 with new resorts attracting high rollers as well as leisure gamblers. Also, efforts undertaken by Macau operators to revive revenues by wooing tourists and recreational gamblers with family-friendly resorts and more non-gaming facilities have finally started yielding results. In fact, Macau’s gaming revenues were up in April that marked the ninth consecutive month of gains, thereby signaling that the casino hub is firmly on its path to recovery.
We note that the opening of Wynn Palace (in Aug 2016) was a major reason for the turnaround in gambling revenues in Macau as it attracted visits from tourists and leisure gamblers. Moreover, the resort is poised to fortify the company’s position in the Cotai strip over the long term.
Also, the government of China is considering measures to support Macau’s economy in all aspects and introduce favorable policies, which are expected to improve visitation pattern and boost tourism.
Thus, it seems that the worst is over for Macau as the gambling industry is showing clear signs of stabilization.
Focus on Non-Gaming Revenues: Wynn Resorts generates a solid share of its revenues from Macau resorts. Apart from the gaming business in Macau, the company has been increasingly focusing on boosting non-gaming revenues. Given the decent visitation pattern in Macau, infrastructure development and government’s efforts to boost tourism, non-gaming sources are expected to boost revenues, going forward.
In fact, building resorts in Asia should help the company capitalize on the strong consumer spending trend in the region.
Domestic Market Expansion: In order to boost performance in Las Vegas, the company has remodeled rooms at its properties and the baccarat pit. Its properties in Las Vegas should thus continue to cash in on the favorable trends of improving employment rate and positive tourism numbers in the region. Moreover, Wynn Resorts’ casino resort that is anticipated to open in Massachusetts in 2019, should strengthen its presence in the U.S. market. Moving ahead, the company plans to start building Wynn Paradise Park by year-end, taking over a footprint that includes the Wynn Golf Club comprising restaurants, hotels and other entertainment options.
Our Take
Does this mean that the company has been lying on a bed of roses? Well, not really!
Despite the revival in Macau, concerns related to the sustainability of revenues from the VIP market still linger, suggesting that it will take some time for the region to return to its former glory. In fact, in the first quarter of 2017, Wynn Resorts recorded a decrease of 3.5% in its revenues at Wynn Macau.
Additionally, continual construction around Wynn Resorts has been hampering foot traffic therein of late. Also, the opening of Wynn Resorts is somewhat leading to cannibalization at Wynn Macau.
Also, the latest crackdown on the junket industry by the Macau government as well as efforts to stop money laundering by limiting ATM withdrawals and use of facial recognition technology at ATMs could restrict gaming revenues in the near term.
Meanwhile, Wynn Palace is likely to face extreme peer pressure from several local Chinese casino operators as well as the recently opened The Parisian Macao and the Sands Cotai Central project of Las Vegas Sands Corp. (LVS - Free Report) . Another U.S.-based company, MGM Resorts International’s (MGM - Free Report) $2.9 billion casino hotel is also set to open in Cotai in the fourth quarter of 2017. We believe that these openings might pose a huge threat to the company’s business in the region in the future.
Despite the headwinds, Wynn Resorts is well poised for growth given its solid fundamentals, strong brand recognition, increasing market share, focus on non-gaming revenues and a fairly favorable macro environment.
Notably, the Zacks Consensus Estimate for Wynn Resorts’ current quarter’s earnings has moved up 40%, reflecting four upward revisions versus none downward over the last 60 days. Also, current year’s earnings estimates have inched up 38.7%, on the back of five upward revisions versus no downward revision. All these positive earnings estimate revisions testifies the unwavering confidence that analysts have in the company and further adds to the optimism in the stock.
Another top-ranked stock in this sector is Melco Resorts & Entertainment Limited (MLCO - Free Report) sporting the same Zacks Rank as Wynn Reorts. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Melco Resorts’ full-year 2017 earnings climbed 43.8% over the last 60 days. Further, for 2017, EPS is expected to increase a solid 82.6%.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>