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Wynn Resorts Cut At JPMorgan On Valuation

Following the YTD rally in Wynn Resorts, Limited WYNN shares, JPMorgan’s Joseph Greff downgraded the rating on the company from Overweight to Neutral, while reducing the price target from $101 to $94. The analyst commented that the shares now offer “an even risk-reward.”

Year-to-date, YTD, Wynn Resorts’ shares have gained 37 percent versus a 9 percent decline in its US-listed Macau peers and a 5 percent gain in the S&P 500. The company’s shares have been driven by investor enthusiasm over Wynn Palace’s opening and growth prospects, analyst Joseph Greff noted.

Lower Macau Operating Estimates

The Macau property-level EBITDA estimate for 2Q16 has been reduced from $182m to $164m on lower mass volumes. Greff pointed out that Wynn Macau likely outperformed the Macau market, although there is limited market-wide data indicating this. He added, however, that the consensus estimates for Wynn Palace’s 2017 EBITDA, at $469m, looks aggressive.


“WYNN possesses an attractive growth trajectory with a path to almost $9+ in 2020 EPS, a 24% CAGR, and $2.1b in property level EBITDA, a 13% CAGR. We still see a path for WYNN to grow EBITDA, EPS and free cash flow per share attractively over the next five years, and because of this, longer-term investors may opt to stand pat,” the analyst wrote.

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Jul 2016JP MorganDowngradesOverweightNeutral
Apr 2016CLSADowngradesBuyOutperform
Apr 2016Deutsche BankDowngradesBuyHold

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