Wynn Stock Deserves More Credit for UAE and Macau, Suggests Analyst

Amid fears about China’s weak economic outlook, some investors were quick to dismiss Macau and Chinese stocks such as Wynn Macau. The stocks of the company’s parent, Wynn Resorts, have also seen a decrease on a year-to-date basis.

Stifel Analyst, Optimistic About Wynn Resorts’ Stocks

Still, an expert analyst remained optimistic about Wynn Resorts, especially considering the gaming and hospitality’s intentions in the United Arab Emirates (UAE) and dedication to Macau. Steven Wieczynski, an analyst with Stifel, quoted by Casino.org, argued that some investors swiftly dismissed Wynn’s stocks, outlining that they certainly have not considered the tailwinds related to the company’s project in UAE and assets in Macau.

When it comes to the strength of Wynn, the expert pointed to an upcoming presentation by the company scheduled for next month. Wieczynski explained that Wynn is expected to “spend a considerable amount of time going through their long-term growth opportunities with a specific focus around their UAE project.” He added that it is unlikely for the leading gaming and entertainment company to hold such a massive investors event if it wasn’t “confident in the long-term financial benefits this project should bring.”

“We do believe current trading levels of WYNN shares are essentially pricing in almost zero value for their Macau assets (as well as their UAE project), which we believe is way too pessimistic/Draconian.“

Steven Wieczynski, analyst at Stifel

The Expert Lowered Price Estimates but Kept a Buy Rating

Focusing on the financial aspect, the analyst confirmed that he lowered the estimates for both Wynn Macau and Wynn Las Vegas. Keeping a “buy” rating for the two, Wieczynski set a price target of $121 for the former and $103 for the latter. However, even with that decrease in the price estimate, the price target was approximately 35% premium on the market close as of Thursday.

Recently, Wynn confirmed the pricing of $800 million in senior notes due in 2033 with a 6.250% interest rate. The company hinted that the extra proceeds would be used to redeem bounds due to mature in 2025. At the same time, Wynn said that the extra funds may be redirected to paying the record $130 million settlement with the US Department of Justice.