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Wynn Resorts (WYNN) Stock Up 75% in a Year: More Upside Left?
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Shares of Wynn Resorts, Limited (WYNN - Free Report) have surged 74.5% in the past year compared with the industry’s 44.7% growth. The company is benefiting from improved non-gaming revenues and expansion in domestic markets. Also, an emphasis on strategic investments and sports betting expansion bode well.
An upward revision in earnings estimates for 2023 reflects analysts’ optimism regarding the company’s growth potential. In the past 60 days, the Zacks Consensus Estimate for fiscal 2023 earnings has moved up 80.2% to $1.82 per share.
Key Growth Drivers
WYNN is benefiting from the sound demand for sports betting. It collaborated with several engaging content creators to develop unique sports-themed programs.
Image Source: Zacks Investment Research
In the first quarter of 2023, the company launched retail sports betting at Encore Boston Harbor. Following the launch, Wynn Resorts reported a 20% increase in sign-ups (year to date) to its Wynn Rewards loyalty program. The company anticipates solid revenue generation due to new product features and a unique marketing campaign.
An increased focus on high-ROI development projects in Boston and the UAE bodes well. Wynn Resorts and Marjan, RAK Hospitality Holding recently reached an agreement to develop a multi-billion-dollar integrated resort on the artificial Al Marjan Island in Ras Al Khaimah, the United Arab Emirates. The resort is scheduled to open in 2026. This will mark the company’s first resort in the MENA region.
In the first quarter of 2023, Wynn Resorts progressed in project designs. Also, optimism can be noted due to opportunities arising from the backdrop of beachside setting development. Coming to Boston, the company progressed with planned projects, thereby offering additional parking, food and beverage options and entertainment amenities.
Wynn Resorts focuses on non-gaming avenues to drive growth. The company emphasizes introducing innovative non-gaming investments that drive increased tourism and strong shareholder returns. Going forward, WYNN remains optimistic about the strong forward group demand pipeline, ongoing pricing power for rooms, healthy handling declines and a robust programming calendar (in the second half of the year).
Wynn Resorts receives a sizable portion of its income from Macau. Given that the Chinese economy is gradually picking up steam, the worst appears to be behind the Macau gambling industry. Wynn Resorts (Macau) and the Macau government came into a 10-year deal for the renewal of Wynn Macau and Wynn Palace Cotai's gaming concession in the fourth quarter of 2022.
For 2023, the company expects Capex related to concession commitments in the range of $50-$220 million. Wynn Resorts believes that the proposed Capex and programming will drive growth in the upcoming periods.
Hurdles
Although Wynn Resorts reported a solid recovery in the Macau and Las Vegas regions in the first quarter of 2023, a decline in visitation from pre-pandemic levels is a concern. During the quarter, the company witnessed soft international visitation, particularly from Europe and Latin America.
Also, the dismal unrated and group business in the Macau region added to the downside. Although visitation is likely to improve in the coming months, it is expected to take time to attain pre-pandemic levels.
Zacks Rank & Key Picks
Wynn Resorts currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
Royal Caribbean Cruises Ltd. (RCL - Free Report) sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 26.4%, on average. Shares of RCL have surged 138.6% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Royal Caribbean Cruises’ 2023 sales and EPS indicates a rise of 48.5% and 162.8%, respectively, from the year-ago period’s levels.
Trip.com Group Limited (TCOM - Free Report) sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 147.9%, on average. Shares of TCOM have increased 63.9% in the past year.
The Zacks Consensus Estimate for Trip.com Group’s 2023 sales and EPS implies an increase of 102.2% and 334.5%, respectively, from the year-ago period’s levels.
Skechers U.S.A., Inc. (SKX - Free Report) sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 18.8%, on average. Shares of SKX have increased 40% in the past year.
The Zacks Consensus Estimate for Skechers U.S.A.’s 2023 sales and EPS suggests a rise of 7.8% and 31.9%, respectively, from the year-ago period’s levels.
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Wynn Resorts (WYNN) Stock Up 75% in a Year: More Upside Left?
Shares of Wynn Resorts, Limited (WYNN - Free Report) have surged 74.5% in the past year compared with the industry’s 44.7% growth. The company is benefiting from improved non-gaming revenues and expansion in domestic markets. Also, an emphasis on strategic investments and sports betting expansion bode well.
An upward revision in earnings estimates for 2023 reflects analysts’ optimism regarding the company’s growth potential. In the past 60 days, the Zacks Consensus Estimate for fiscal 2023 earnings has moved up 80.2% to $1.82 per share.
Key Growth Drivers
WYNN is benefiting from the sound demand for sports betting. It collaborated with several engaging content creators to develop unique sports-themed programs.
Image Source: Zacks Investment Research
In the first quarter of 2023, the company launched retail sports betting at Encore Boston Harbor. Following the launch, Wynn Resorts reported a 20% increase in sign-ups (year to date) to its Wynn Rewards loyalty program. The company anticipates solid revenue generation due to new product features and a unique marketing campaign.
An increased focus on high-ROI development projects in Boston and the UAE bodes well. Wynn Resorts and Marjan, RAK Hospitality Holding recently reached an agreement to develop a multi-billion-dollar integrated resort on the artificial Al Marjan Island in Ras Al Khaimah, the United Arab Emirates. The resort is scheduled to open in 2026. This will mark the company’s first resort in the MENA region.
In the first quarter of 2023, Wynn Resorts progressed in project designs. Also, optimism can be noted due to opportunities arising from the backdrop of beachside setting development. Coming to Boston, the company progressed with planned projects, thereby offering additional parking, food and beverage options and entertainment amenities.
Wynn Resorts focuses on non-gaming avenues to drive growth. The company emphasizes introducing innovative non-gaming investments that drive increased tourism and strong shareholder returns. Going forward, WYNN remains optimistic about the strong forward group demand pipeline, ongoing pricing power for rooms, healthy handling declines and a robust programming calendar (in the second half of the year).
Wynn Resorts receives a sizable portion of its income from Macau. Given that the Chinese economy is gradually picking up steam, the worst appears to be behind the Macau gambling industry. Wynn Resorts (Macau) and the Macau government came into a 10-year deal for the renewal of Wynn Macau and Wynn Palace Cotai's gaming concession in the fourth quarter of 2022.
For 2023, the company expects Capex related to concession commitments in the range of $50-$220 million. Wynn Resorts believes that the proposed Capex and programming will drive growth in the upcoming periods.
Hurdles
Although Wynn Resorts reported a solid recovery in the Macau and Las Vegas regions in the first quarter of 2023, a decline in visitation from pre-pandemic levels is a concern. During the quarter, the company witnessed soft international visitation, particularly from Europe and Latin America.
Also, the dismal unrated and group business in the Macau region added to the downside. Although visitation is likely to improve in the coming months, it is expected to take time to attain pre-pandemic levels.
Zacks Rank & Key Picks
Wynn Resorts currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
Royal Caribbean Cruises Ltd. (RCL - Free Report) sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 26.4%, on average. Shares of RCL have surged 138.6% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Royal Caribbean Cruises’ 2023 sales and EPS indicates a rise of 48.5% and 162.8%, respectively, from the year-ago period’s levels.
Trip.com Group Limited (TCOM - Free Report) sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 147.9%, on average. Shares of TCOM have increased 63.9% in the past year.
The Zacks Consensus Estimate for Trip.com Group’s 2023 sales and EPS implies an increase of 102.2% and 334.5%, respectively, from the year-ago period’s levels.
Skechers U.S.A., Inc. (SKX - Free Report) sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 18.8%, on average. Shares of SKX have increased 40% in the past year.
The Zacks Consensus Estimate for Skechers U.S.A.’s 2023 sales and EPS suggests a rise of 7.8% and 31.9%, respectively, from the year-ago period’s levels.