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Here's Why You Should Retain Wynn Resorts (WYNN) Stock Now
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Wynn Resorts, Limited (WYNN - Free Report) will likely benefit from non-gaming revenue-boosting strategies, solid Macau performance and expansion efforts. Also, focus on concession-related capital endeavors bodes well. However, a volatile macroeconomic environment is a concern.
Let us discuss the factors that highlight why investors should retain the stock.
Factors Likely to Drive Growth
Wynn Resorts focuses on non-gaming avenues to drive growth. In third-quarter 2023, the company’s non-gaming business witnessed robust growth owing to strength across tenant retail sales (up 24% from 2019 levels) and hotel revenues (20%). During the quarter, non-gaming revenues amounted to $54.4 million. Attributes like quality product and service offerings, the relaunch of the loyalty program and the robust non-gaming events calendar added to the positives. The company continues to introduce innovative non-gaming investments that boost tourism and strong shareholder returns. This includes investments in a new theater, events center, entertainment center, incremental parking, food and beverage and entertainment amenities.
Wynn Resorts derives a solid share of revenues from Macau — the most prominent gaming destination in the world. The worst seems to be over for Macau's gaming industry as China's economy is slowly gaining momentum. During the third quarter, Wynn Resorts witnessed growth in Macau's mass gaming, luxury retail and hotel businesses, portraying exceptional post-Covid recovery. Higher business volumes backed by the discontinuation of pandemic-related travel restrictions were tailwinds.
In Macau's development realm, the company anticipates unveiling its initial concession-related capital endeavor by 2023 end. To this end, the company collaborated with Illuminarium's team (from Las Vegas) to introduce a captivating multimedia exhibit space. Alongside the project, the company is actively engaged in planning and designing additional concession-related capital commitments. These include the creation of a destination food hall, the establishment of a new event and entertainment center and the development of an exclusive spectacle show. For the period 2023 (through 2024), the company expects capex related to concession commitments to be in the range of $300-$400 million. The company anticipates that the proposed capex and programming will drive growth in the upcoming periods.
The emphasis on the expansion of new markets bodes well. Wynn Resorts and Marjan, RAK Hospitality Holding recently inked 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. During the third quarter of 2023, the company progressed with respect to the project design. Also, optimism can be noted due to opportunities arising from the backdrop of beachside setting development.
Concerns
Image Source: Zacks Investment Research
In the past year, shares of Wynn Resorts have gained 7.9% compared with the industry’s 28.6% growth. A challenging macro environment mainly caused the downside.
Increased operating expenses are a concern for the company. During the third quarter of 2023, the company’s total operating expenses came in at $1.6 billion compared with $0.9 billion reported in the prior-year quarter. The upside was primarily due to a rise in casino, room, food and beverage, entertainment, retail and other and general and administrative expenses. The company remains cautious of interest rate increases.
Zacks Rank & Key Picks
Wynn Resorts currently carries a Zacks Rank #3 (Hold).
Live Nation Entertainment, Inc. (LYV - Free Report) flaunts a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 37.5%, on average. Shares of LYV have increased 32.7% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LYV’s 2024 sales and EPS suggests an improvement of 8.2% and 61.1%, respectively, from the prior-year levels.
JAKKS Pacific, Inc. (JAKK - Free Report) sports a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 61.8%, on average. Shares of JAKK have skyrocketed 108.5% in the past year.
The Zacks Consensus Estimate for JAKK’s 2024 sales calls for 3.6% growth from the year-earlier levels.
Royal Caribbean Cruises Ltd. (RCL - Free Report) carries a Zacks Rank #2 (Buy). RCL has a trailing four-quarter earnings surprise of 28.3%, on average. Shares of RCL have surged 163.8% in the past year.
The Zacks Consensus Estimate for RCL’s 2024 sales and EPS indicates a rise of 13.7% and 38.1%, respectively, from the year-ago levels.
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Here's Why You Should Retain Wynn Resorts (WYNN) Stock Now
Wynn Resorts, Limited (WYNN - Free Report) will likely benefit from non-gaming revenue-boosting strategies, solid Macau performance and expansion efforts. Also, focus on concession-related capital endeavors bodes well. However, a volatile macroeconomic environment is a concern.
Let us discuss the factors that highlight why investors should retain the stock.
Factors Likely to Drive Growth
Wynn Resorts focuses on non-gaming avenues to drive growth. In third-quarter 2023, the company’s non-gaming business witnessed robust growth owing to strength across tenant retail sales (up 24% from 2019 levels) and hotel revenues (20%). During the quarter, non-gaming revenues amounted to $54.4 million. Attributes like quality product and service offerings, the relaunch of the loyalty program and the robust non-gaming events calendar added to the positives. The company continues to introduce innovative non-gaming investments that boost tourism and strong shareholder returns. This includes investments in a new theater, events center, entertainment center, incremental parking, food and beverage and entertainment amenities.
Wynn Resorts derives a solid share of revenues from Macau — the most prominent gaming destination in the world. The worst seems to be over for Macau's gaming industry as China's economy is slowly gaining momentum. During the third quarter, Wynn Resorts witnessed growth in Macau's mass gaming, luxury retail and hotel businesses, portraying exceptional post-Covid recovery. Higher business volumes backed by the discontinuation of pandemic-related travel restrictions were tailwinds.
In Macau's development realm, the company anticipates unveiling its initial concession-related capital endeavor by 2023 end. To this end, the company collaborated with Illuminarium's team (from Las Vegas) to introduce a captivating multimedia exhibit space. Alongside the project, the company is actively engaged in planning and designing additional concession-related capital commitments. These include the creation of a destination food hall, the establishment of a new event and entertainment center and the development of an exclusive spectacle show. For the period 2023 (through 2024), the company expects capex related to concession commitments to be in the range of $300-$400 million. The company anticipates that the proposed capex and programming will drive growth in the upcoming periods.
The emphasis on the expansion of new markets bodes well. Wynn Resorts and Marjan, RAK Hospitality Holding recently inked 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. During the third quarter of 2023, the company progressed with respect to the project design. Also, optimism can be noted due to opportunities arising from the backdrop of beachside setting development.
Concerns
Image Source: Zacks Investment Research
In the past year, shares of Wynn Resorts have gained 7.9% compared with the industry’s 28.6% growth. A challenging macro environment mainly caused the downside.
Increased operating expenses are a concern for the company. During the third quarter of 2023, the company’s total operating expenses came in at $1.6 billion compared with $0.9 billion reported in the prior-year quarter. The upside was primarily due to a rise in casino, room, food and beverage, entertainment, retail and other and general and administrative expenses. The company remains cautious of interest rate increases.
Zacks Rank & Key Picks
Wynn Resorts currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Consumer Discretionary sector are:
Live Nation Entertainment, Inc. (LYV - Free Report) flaunts a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 37.5%, on average. Shares of LYV have increased 32.7% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LYV’s 2024 sales and EPS suggests an improvement of 8.2% and 61.1%, respectively, from the prior-year levels.
JAKKS Pacific, Inc. (JAKK - Free Report) sports a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 61.8%, on average. Shares of JAKK have skyrocketed 108.5% in the past year.
The Zacks Consensus Estimate for JAKK’s 2024 sales calls for 3.6% growth from the year-earlier levels.
Royal Caribbean Cruises Ltd. (RCL - Free Report) carries a Zacks Rank #2 (Buy). RCL has a trailing four-quarter earnings surprise of 28.3%, on average. Shares of RCL have surged 163.8% in the past year.
The Zacks Consensus Estimate for RCL’s 2024 sales and EPS indicates a rise of 13.7% and 38.1%, respectively, from the year-ago levels.