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What's in Store for Wynn Resorts (WYNN) in Q2 Earnings?

Wynn Resorts, Limited WYNN is slated to report second-quarter 2017 numbers on Jul 25, after market close

In the last reported quarter, Wynn Resorts delivered a 67.57% positive earnings surprise. Moreover, the trailing four-quarter average earnings surprise is pegged at a positive 11.86%.

Let’s see how things are shaping up for this announcement.

Wynn Resorts, Limited Price and EPS Surprise


Wynn Resorts, Limited Price and EPS Surprise | Wynn Resorts, Limited Quote

Factors Likely to Affect Q2 Results

Stringent capital controls by the Chinese government and increased audits of the junket industry by Macau’s Gaming Inspection and Coordination Bureau (DICJ) in order to stop money laundering has somewhat restricted gaming revenues in Macau. Nevertheless, per the DICJ, gross gaming revenues (GGR) rose in all the three months of the quarter, thereby indicating that the casino hub is firmly on its path to recovery.

Thus, we expect Wynn Resorts’ consistent efforts to boost tourism and traffic in Macau to bolster second-quarter performance aided by the improved operating environment therein.

Particularly, the company’s full-scale integrated resort in Cotai, Wynn Palace, continues to attract visits by tourists and leisure gamblers, and should thus scoop up the quarter’s revenues. Provision of better non-gaming options might further propel results in the to-be-reported quarter.

Meanwhile, the company’s properties in Las Vegas are likely to continue to cash in on the positive trends of improving employment rate and increasing tourism numbers in the region, thereby boosting the quarter’s top- and bottom¬-line growth.

However, higher promotional allowances and distribution of higher incentives in the slots as well as in the mass market to hold market share might hamper the quarter’s profitability. In fact, second-quarter results may also be somewhat hampered as concerns related to the sustainability of revenues from the VIP market linger.

Earnings Whispers

Our proven model does not conclusively show an earnings beat for Wynn Resorts this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.

Zacks ESP: Wynn Resorts has an Earnings ESP of -3.67%. This is because the Most Accurate estimate is $1.05, while the Zacks Consensus Estimate is pegged higher at $1.09. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Wynn Resorts has a Zacks Rank #2, which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult.

Notably, we caution you against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Penn National Gaming, Inc. PENN has an Earnings ESP of +8.33% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Time Warner Inc. TWX has an Earnings ESP of +3.39% and a Zacks Rank #2.

Live Nation Entertainment, Inc. LYV has an Earnings ESP of +31.25% and a Zacks Rank #3.

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Wynn Resorts, Limited (WYNN): Free Stock Analysis Report
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