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Wynn Resorts has more to gain as a recovery in its Macao properties continues, according to Barclays. The bank upgraded the casino giant to overweight from equal weight on Wednesday. It also hiked its price target on the stock to $135 from $120. The new target implies upside of 31% from Tuesday’s close. Wynn Resorts has been on fire this year, adding nearly 25%. Despite the already strong gain for the stock, analyst Brandt Montour thinks the casino operator remains “under appreciated by the market.” WYNN YTD mountain Wynn stock in 2023 “We see an opportunity to raise the third out of three Macau stocks under our coverage to OW, as evidence is accruing that WYNN’s Macau business is heading for 2019 EBITDA generation faster than we (or we think anyone) thought, and soon we could be talking about ‘how much above 2019’ Wynn Macau can recover to (based on structurally higher margins ex-junkets),” Montour said. Montour also pointed to potential pent-up demand for the Macao market, while noting improvements to transportation in the area and government support for recovery in the sector as key drivers for Wynn. And the company’s Las Vegas business remains strong, Montour noted. CEO Craig Billings said during the company’s first-quarter earnings call earlier this month that Wynn Las Vegas had a record adjusted net EBITDAR (earnings before interest, taxes, depreciation, amortization and restructuring or rent costs) of $232 million. “We increasingly believe WYNN will be able to hold onto recent property performance in Las Vegas in spite of macro conditions worsening, or at least hold in better than we think current investor expectations assume, based on a certain level of scarcity value for WYNN’s high-end product that should keep it relatively insulated,” Montour said. — CNBC’s Michael Bloom contributed to this report.
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