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Wynn Resorts Ltd. (WYNN) is a hotel-casino operator with international operations. It designs, develops, and operates resorts through four segments: Wynn Palace, Wynn Macau, Encore Boston Harbor, and Las Vegas Operations. Additionally, it also manages Wynn Interactive, its digital sports betting and iGaming platform. Established in 2002, the resort chain has its headquarters in Las Vegas.
WYNN stock has underperformed the broader market in 2024, up just 1.6% YTD, but is in the green with a gain of 10.6% over the past 6 months.
At current levels, WYNN trades at a multiple of about 16x forward earnings and 1.41x sales - which is cheaper than its historical averages.
Wynn Beats on Q1 Earnings
Wynn Resorts reported its Q1 results on May 7, with earnings rising to $1.30 per share, or $1.59 per share on an adjusted basis. That comfortably topped Wall Street's estimate of $1.43 per share.
The casino operator generated revenue of $1.86 billion for the period, up 30.9% YoY, and exceeding analysts' $1.77 billion prediction. Gross margin narrowed to 44.5% from 64.3% in the year-ago quarter, while operating margin improved to 19.5% from 11.9%.
Drilling down to individual segments, its Macau operations generated revenue of $998.6 million, up 66.4% from last year, while revenue from Las Vegas rose 8.47% to $636.5 million.
Analysts' Take on WYNN
Analysts are very bullish on this resort and casino stock, with the consensus opinion rising from “Moderate Buy” to “Strong Buy” over the last month. Currently, 14 analysts are tracking WYNN stock, with 10 rating it a “Strong Buy” and the rest giving it a “Hold” rating.
After earnings, Argus analyst John Staszak upgraded the stock to a “buy” rating with a price target of $110, signifying expected upside potential of 18.9% from current levels.
The analyst highlighted the company’s 16.2x revised 2024 EPS estimate, which is lower than its 5-year average of 22x, and said “the current share price inadequately reflects growing contributions from the company's hotels and prospects for strong growth at the Wynn Macau.”
Staszak also noted that the company is set to benefit from the return of convention groups to Las Vegas, an expansion of its online sports betting segment, and solid results at its Boston outpost.
While Argus is optimistic, analysts' consensus price target on WYNN is set even higher, at $124.61 - suggesting the stock could rally 34.6% from here.
On the date of publication, Ruchi Gupta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
