Deutsche Bank Needs A Breather In Wynn, Remains 'A Believer'

Deutsche Bank's Carlo Santarelli has maintained a Buy rating on Wynn Resorts, Limited WYNN, with a price target of $82. According to Santarelli, "the near term is likely to offer opportunities for longer term oriented investors to accumulate shares at lower levels, and presumably with more clarity around key issues that will ultimately shape the fundamental recovery." Santarelli believes that there could be downside risk to the stock moving into March, with the Macau March GGR declining from the February comps, as well as impacts of Macau-related policy measures, softening of the VIP business with capital issues being witnessed by more junkets and the company delaying the Cotai project further. In addition, the analyst believes that the stock has appreciated 52 percent since its mid-January lows due to "1) solid 4Q results and more importantly, stability in Consensus forecasts, 2) Mr. Wynn's financial show of support and belief in the longer term trajectory of Macau and WYNN shares, 3) the unwinding of a crowded short trade, 4) mass market stability in Macau, and 5) February GGR migrating to a potential low to mid single digit y/y decline." However, the analyst expressed optimism regarding an improvement in the share price performance into end-March, with Macau market revenue strengthening, compared to the run rate in the first half of February.