Wynn Resorts Faces Challenges Despite Analyst Optimism
With a market cap of $10 billion, Wynn Resorts, Limited (WYNN) stands as a prominent player in the casino resort industry. Based in Las Vegas, Nevada, the company operates through four main segments: Wynn Palace, Wynn Macau, Las Vegas Operations, and Encore Boston Harbor.
Stock Performance Trails Broader Market
Wynn Resorts’ stock has lagged significantly behind the overall market in the past year. Over the last 52 weeks, shares have risen only 5.6%, contrasting sharply with the S&P 500 Index’s impressive 31.1% gain. Year to date (YTD), the performance remains lackluster, with WYNN’s stock edging up modestly compared to the S&P 500’s nearly 24.7% increase.
Consumer Discretionary Sector Outshines WYNN
Further illustrating WYNN’s struggles, the Consumer Discretionary Select Sector SPDR Fund (XLY) achieved a 28.3% gain over the past year and a 20.2% rise YTD. This paints a clear picture of the challenges faced by Wynn Resorts in a competitive landscape.
Q3 Earnings Fall Short of Expectations
On November 4, WYNN’s shares dropped 9.3% following disappointing Q3 earnings results. The company reported a revenue increase of 1.2%, reaching $1.69 billion, but this fell short of analysts’ expectations of $1.73 billion. Additionally, the adjusted earnings per share (EPS) of $0.90 also missed the consensus estimate of $1.17 and marked a 9.1% decline from the previous year. The downturn was mainly due to reduced revenues from its Las Vegas and Wynn Palace operations.
Mixed Outlook and Analyst Ratings
Looking ahead, analysts anticipate that WYNN’s EPS will grow by 18.8% year-over-year to $4.87 for the current fiscal year, concluding in December. Historically, the company’s earnings surprises have shown a mixed pattern, with two beats and two misses in the last four quarters.
Despite recent setbacks, WYNN enjoys robust analyst support. Of the 15 analysts covering the stock, the consensus rating is a “Strong Buy.” This depends on 11 “Strong Buy” ratings, one “Moderate Buy,” and three “Hold” recommendations.
Future Price Potential
On November 5, Stifel reaffirmed its “Buy” rating on WYNN and lifted its price target to $125, which is the highest on Wall Street. This new target implies a potential upside of 36.2% from current trading levels. Furthermore, the average price target among analysts stands at $114.25, suggesting a 24.5% upside from WYNN’s recent prices.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are intended for informational purposes only. For additional details, please view the Barchart Disclosure Policy here.
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