Wynn Resorts, Limited (NASDAQ: WYNN) is set to benefit from a return of the high rollers to a resurgent Macau, Goldman Sachs said Tuesday.
Goldman Sachs analyst Stephen Grambling upgraded Wynn Resorts from Neutral to Buy and raised the price target from $140 to $155.
Grambling continues to also have Buy ratings on other stocks in the sector: Las Vegas Sands Corp. (NYSE: LVS), Red Rock Resorts Inc. (NASDAQ: RRR), and VICI Properties Inc (NYSE: VICI), and said all will benefit from stronger revenue in casinos.
Several factors are combining to make Wynn Resorts more attractive, including:
- Inflecting free cash flow as major capital projects are completed
- New projects in Boston and Las Vegas
- Stabilizing Gross Gaming Revenue
- Investments in Macau that Should Bring VIP gamblers back
High Rollers Are Back
The Macau gaming scene is set for a rebound, Grambling said, with $15 billion in planned investments that should bring VIP gamblers back from other Asian destinations. Casinos will also get some regulatory help from changes in Macau. All that should make Wynn attractive as it’s at near-trough valuation.
The optimism is in stark contrast to early in the year, when analysts worried that slowing economic growth in China would hurt Macau revenue this year, a fear compounded a few months later by political turmoil and protests in nearby Hong Kong.
He also cited the recent opening of Encore Boston Harbor with results outpacing expectations, and Wynn’s re-opening of a golf course and convention center expansion in Las Vegas that could drive earnings.
The macro changes in the gambling outlook, particularly in Macau, will boost all industry players there, Grambling said.
Wynn Resorts was up 2% to $110.41 at publication time.
Casino Analyst Bullish On Vegas, But Not Macau
Casinos Among The Hardest-Hit Businesses During Economic Downturns
Latest Ratings for WYNN
View More Analyst Ratings for WYNN
View the Latest Analyst Ratings
See more from Benzinga
- Video: Mattel's Fisher Price Makes Us Feel Young Again With John Goodman 'Let's Be Kids' Ad
- How iPhone 11 Launch Day Enthusiasm Compares At These Apple Stores
- ESPN To Stream Additional Sports Programming On Facebook Watch
© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.