Written by Sam Bogda
shares Wynn Resorts Ltd (NASDAQ 🙂 upgraded to Outperform from Neutral with an unchanged price target of $117 per share by Credit Suisse analyst Thursday.
He told investors that at current levels, they believe Wynn is “one of the most compelling stories in gaming.” The analyst pointed to three areas where they see a potential upward trend, including Vegas trends, Macau sentiment and valuation.
“The upside to Vegas is driven in part by the expansion of the convention center, which is nearly doubling available meeting space,” the analyst said. “We think Macau sentiment is near the bottom (casinos were briefly closed in the third quarter of 22), and while the timeline for recovery is clearly unclear, we believe this is more than just pricing. And when that happens, we think there is A shift in the mix to a higher margin premium/team gaming will benefit from EBITDA margins, which are not reflected in street estimates.”
Finally, regarding the company’s valuation, he noted that it is “compelling and presents an attractive risk/return”.
“Although the timeline for Macau’s payback is unclear, we do not believe you are paying for this option. We see valuation support at $45/share (or 10% lower) which is a level we believe indicates zero value for Macau and zero value for betting sports.”
Wynn shares rose more than 8% Thursday.