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Here's Why You Should Retain Wynn Resorts' (WYNN) Stock

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Wynn Resorts, Limited (WYNN - Free Report) will likely benefit from sports-betting expansion, non-gaming revenue-boosting strategies and expansion efforts. However, subdued visitation in Macau remains a concern.

Let us discuss the factors highlighting why investors should retain the stock for the time being.

Growth Catalysts

Wynn Resorts has been focusing on sports betting to drive growth. To focus on online betting, the company announced the merger of Wynn Interactive with Austerlitz Acquisition Corp. The company will invest $640 million to drive growth. WynnBET sports betting and online casino application were operational in New Jersey for quite some time.

In 2021, the company strengthened third-party partnerships through agreements with the Detroit Lions, the Colorado Rockies and Cumulus Media. Additionally, the company collaborated with several engaging content creators to develop a unique sports-themed program. During first-quarter 2022, Wynn Interactive generated nearly $727 million in turnover across casino and sports betting. The company anticipates solid revenue generation from new product features and a unique marketing campaign. Also, a green signal by Massachusetts Senate concerning Sports Betting Bill will likely act as a catalyst for Wynn Bet in the Commonwealth.

Wynn Resorts focuses on non-gaming avenues to drive growth. During the first quarter of 2022, the company emphasized on the Las Vegas market, thereby making significant additions to the non-gaming business. The company opened Delilah and Casa Playa, remodeled the Wind Tower rooms and restructured lounges adjacent to the Lake of Dreams. The company remains optimistic and anticipates the initiatives to drive revenues in the upcoming periods.

Emphasis on the expansion of new markets bodes well. Wynn Resorts and Marjan, RAK Hospitality Holding recently reached an agreement to develop a multibillion-dollar integrated resort on the artificial Al Marjan Island in Ras Al Khaimah, United Arab Emirates. This move marks Wynn Resorts’ foray into a new market. The resort is scheduled to open in 2026. This will mark the company’s first resort in the MENA region. The luxury hotel will have more than 1,000 rooms, top-notch shopping venues, state-of-the-art meeting and a convention facility, an exclusive spa, more than 10 restaurants and lounges. During the first quarter of 2022, the company stated to have progressed with respect to the project design. Also, optimism can be noted on account of opportunities arising from the backdrop of beachside setting development.

Concerns

Zacks Investment Research
Image Source: Zacks Investment Research

Shares of Wynn Resorts have declined 22.7% in the past three months, compared with the industry’s 17.7% fall. The dismal performance was primarily caused by the coronavirus crisis. During first-quarter 2022, the company witnessed a dismal performance in the Macau region owing to subdued visitation. During the first quarter, Wynn Macau’s revenues amounted to $135.1 million compared with $179.7 million reported in the prior-year quarter. The downside was primarily due to a fall in casino, rooms and entertainment, retail and other revenues. Notwithstanding the easing of certain COVID-19 protective measures by authorities worldwide, certain travel restrictions, quarantine measures, testing requirements and capacity limitations remain in effect at its Macau Operations. Considering the uncertainties, it is likely to take time for visitation to attain pre-pandemic levels.

Zacks Rank & Key Picks

Wynn Resorts currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the Zacks Consumer Discretionary sector are Bluegreen Vacations Holding Corporation (BVH - Free Report) , Caleres, Inc. (CAL - Free Report) and MGM Resorts International (MGM - Free Report) .

Bluegreen Vacations sports a Zacks Rank #1. BVH has a trailing four-quarter earnings surprise of 85.9%, on average. The stock has increased 47% in the past year.

The Zacks Consensus Estimate for BVH’s current financial year sales and earnings per share (EPS) indicates growth of 11.2% and 35.1%, respectively, from the year-ago period’s reported levels.

Caleres sports a Zacks Rank #1. CAL has a trailing four-quarter earnings surprise of 62.9%, on average. Shares of the company have gained 3.1% in the past year.

The Zacks Consensus Estimate for CAL’s current financial year sales and EPS suggests growth of 4.8% and 0.7%, respectively, from the year-ago period’s levels.

MGM Resorts sports a Zacks Rank #1. MGM has a trailing four-quarter earnings surprise of 212.5%, on average. Shares of the company have declined 26.7% in the past year.

The Zacks Consensus Estimate for MGM’s current financial year sales and EPS suggests growth of 28.1% and 240.3%, respectively, from the year-ago period’s reported levels.

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