Wynn Resorts' (WYNN) Stock up 35% in a Year: More Upside Left?

·4-min read

Wynn Resorts, Limited WYNN is poised to benefit from sports-betting expansion, non-gaming revenue-boosting strategies and expansion efforts. Also, the focus on a 10-year gaming concession in Macau bodes well.

In the past year, shares of Wynn Resorts have gained 34.9% against the industry’s fall of 4%. An upward revision in earnings estimates for 2023 reflects analysts’ optimism regarding the company’s growth potential. In the past 30 days, the Zacks Consensus Estimate for 2023 earnings has moved up 262.5% to 87 cents per share.

Factors Likely to Drive Growth

Wynn Resorts has been focusing on sports betting to drive growth. To focus on online betting, the company announced the merger of Wynn Interactive with Austerlitz Acquisition Corp. The company will invest $640 million to drive growth. WynnBET sports betting and online casino application have been operational in New Jersey for quite some time. Meanwhile, the company has strengthened third-party partnerships through agreements with the Detroit Lions, the Colorado Rockies and Cumulus Media. The company also collaborated with several engaging content creators to develop a unique sports-themed program.

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The company anticipates solid revenue generation on the back of new product features and a unique marketing campaign. Also, a green signal by Massachusetts Senate concerning the Sports Betting Bill is likely to act as a catalyst for Wynn Bet, both in digital and retail sports betting. The company emphasizes on improved marketing efficiency and disciplined cost control to drive growth.

Wynn Resorts focuses on non-gaming avenues to drive growth. During fourth-quarter 2022, the company’s non-gaming business witnessed robust growth owing to strength across F&B and retail. During the quarter, non-gaming revenue increased 13% year over year to $56.8 million. The company emphasizes on introducing innovative non-gaming investments that drive increased tourism and strong shareholder returns. This includes investments in a new theater and an events and entertainment center. The company remains optimistic and anticipates the initiatives to drive revenues in the upcoming periods.

Wynn Resorts derives a solid share of revenues from Macau — the largest gaming destination in the world. Despite the coronavirus pandemic, the company is confident about prospects in Macau. Nevertheless, the worst seems to be over for the gaming industry in Macau as China’s economy is slowly gaining momentum. During the fourth quarter of 2022, Wynn Resorts (Macau) entered into a 10-year agreement with the Macau government for the renewal of its gaming concession, covering Wynn Macau and Wynn Palace Cotai. For 2023, the company expects capex related to concession commitments to be in the range of $50 - $220 million. The company is of the opinion that the proposed capex and programming will drive growth in the upcoming periods.

Emphasis on the expansion of new markets bodes well. Wynn Resorts and Marjan, RAK Hospitality Holding recently reached an agreement to develop a multibillion-dollar integrated resort on the artificial Al Marjan Island in Ras Al Khaimah, United Arab Emirates. This move marks Wynn Resorts’ foray into a new market. The resort is scheduled to open in 2026. This will mark the company’s first resort in the MENA region. The luxury hotel will have more than 1,000 rooms, top-notch shopping venues, a state-of-the-art meeting and convention facility, an exclusive spa and more than 10 restaurants and lounges. During the fourth quarter of 2022, the company progressed with respect to the project design. Also, optimism can be noted due to opportunities arising from the backdrop of beachside setting development.

Zacks Rank & Other Key Picks

Wynn Resorts currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Some other top-ranked stocks in the Zacks Consumer Discretionary sector are Las Vegas Sands Corp. LVS, Hilton Grand Vacations Inc. HGV and Crocs, Inc. CROX.

Las Vegas Sands sports a Zacks Rank #1. LVS has a long-term earnings growth rate of 2.5%. The stock has increased 39.8% in the past year.  

The Zacks Consensus Estimate for LVS’ 2023 sales and EPS indicates a rise of 107.7% and 217.5%, respectively, from the year-ago period’s estimated levels.  

Hilton Grand Vacations currently sports a Zacks Rank #1. HGV has a trailing four-quarter earnings surprise of 12.1%, on average. Shares of HGV have declined 18.7% in the past year.  

The Zacks Consensus Estimate for HGV’s 2023 sales and EPS indicates a rise of 7.1% and 10.8%, respectively, from the year-ago period’s levels.

Crocs carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 21.8%, on average. Shares of Crocs have increased 45.9% in the past year.

The Zacks Consensus Estimate for CROX’s 2023 sales and EPS indicates a rise of 12.5% and 2.5%, respectively, from the year-ago period’s levels.

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