Wynn Resorts Plunges 7% Despite Q3 Beat & Labor Deal With Hospitality Workers

Macquarie analysts increased their price target for Wynn Resorts (NASDAQ:WYNN) to $128.00, up from $122.00, while reiterating an Outperform rating on the stock.

Macquarie’s analysis suggests a positive outlook for Wynn, particularly in Macau, where they believe the consensus forecasts remain overly cautious. The analysts anticipate Wynn Resorts will continue to expand its market share, especially as the recovery progresses beyond the base mass segment.

With the stock's multiples around 9x the estimated earnings for 2024 ahead of the earnings release, the analysts argue that Wynn Resorts presents the most significant potential for estimates and stock price appreciation among major gaming companies. Furthermore, they highlighted the additional value in Wynn's underappreciated assets, estimating over $10 in value from Al Marjan Island ($6), WynnBet ($2), and a 38-acre parcel in Las Vegas ($4).

Wynn Resorts (NASDAQ:WYNN) saw its shares drop by over 7% intra-day today, despite reporting third-quarter results that exceeded expectations, as well as hospitality workers reaching a tentative labor deal with the company, averting a potential strike at the casino. However, investors remained concerned about the inconsistent recovery in the crucial Macau region.

The company's earnings per share (EPS) for the quarter were $0.99, surpassing the Street estimate of $0.74. Additionally, Wynn Resorts experienced a significant year-over-year revenue increase of 87.9%, reaching $1.67 billion, which was higher than the Street estimate of $1.58 billion.

CEO Craig Billings expressed excitement about the company's performance. He highlighted the outstanding results from Wynn Las Vegas and Encore Boston Harbor, which set a new record for adjusted Property EBITDAR in the third quarter.

Wynn Resorts (NASDAQ:WYNN) delivered Q2 results on Wednesday that outperformed analysts' predictions, driven by the ongoing post-COVID rebound in Macau, a prominent gambling hub, which effectively countered the sluggishness observed in North America. Following the announcement, Wynn Resorts saw more than a 3% increase in pre-market today.

The reported figures highlighted an adjusted EPS of $0.91, coupled with a revenue of $1.60 billion. This performance exceeded the Street expectations of an EPS of $0.64 and revenue of $1.54 billion.

Specifically, the operational income in Macau experienced a remarkable turnaround, surging from a loss of $185.3 million in the corresponding period of the previous year to a gain of $121.7 million. Conversely, income in Las Vegas declined from $261.8 million in the prior year to $123.3 million.