Wynn Resorts (WYNN) Stays Up Despite Downgrade
The struggle facing Wynn Resorts (WYNN: 101.54 -2.89%) to secure a Cotai Strip expansion project and the underperformance of the newly opened Wynn Encore in Macau as gaming revenue in the region continues to soar were among the reasons cited by Citi Bank on Friday for rating the casino operator as a “Sell”.
Despite the sell rating, Citi bank has raised its price target on shares of WYNN from $69.9 to $73.30 and has lifted its EPS estimates for the company.
For Fiscal 2010, Citi bank raised EPS estimates from $1.29 to $1.56 and from $1.61 to $1.91 for Fiscal Year 2011.
“With Wynn having a negligible convention presence, we believe its rebound in Vegas will slow. In Macau, the Wynn subsidiary remains our top Sell as it has yet to secure a new property in Cotai and the contribution from Encore has underperformed.”
Citi also noted that while Macau gaming revenue rose 40% year over year in August to MOP$15.8 billion, Wynn’s market value declined 14% during the month.
Citi banks rating has not affected Wynn’s stock who closed Friday’s trading session up 3.71% to $87.81.
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