Wynn Resorts expected to see recovery in 2021 according to Morgan Stanley analysis
Wynn Resorts is expected to outperform initial expectations in the second half of 2021 once a COVID-19 vaccine is found, according to analysis.
The casino operator has suffered a tumultuous 2020 as a result of the COVID-19 pandemic, which forced all of its casinos shut in the US and Asia for at least several months earlier this year.
That led to a revenue decline of 78% year-on-year for Q3, down to just $370.5m compared to the $1.65bn recorded in the same period last year.
It witnessed huge declines from both its Las Vegas and Macau venues, with its Wynn Macau branch seeing revenue drop 89% to $51.4m for the quarter.
However, investment bank and financial services company Morgan Stanley believes the operator will see an upturn of fortunes in 2021, once travel restrictions are relaxed.
In its analysis of the S&P 500, a stock market index measuring the performance of 500 of the largest publicly listed companies in the US, Morgan Stanley says over the next 12 months it remains “bullish on the US equity market” and expects the “average stock to perform better than the index”, during the recovery stage for many businesses.
It believes Wynn’s 2022 EBITDA levels will recover to those seen in 2019 at $1.75bn, which it expects to be supported by a recovery in Macau and an expansion to the operator’s Las Vegas MICE facilities.
Morgan Stanley added: “While Wynn’s business is currently severely impaired due to COVID, we don’t see long-term structural threats while the market appears to be concerned around high-end Macau play.
“We expect Wynn to outperform expectations in H2 2021 once a COVID vaccine is widely disseminated and high-end trends in Macau and Vegas rebound faster than mass.”
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