Wynn Shares Are Folding After A Mixed Q3 Print

Wynn Resorts, Limited WYNN shares were getting pummeled one day after the casino operator's mixed third-quarter earnings report.

The casino operator reported Q3 earnings of $1.68 per share, missing estimates by a penny. Sales came in at $1.71 billion, beating estimates by $50 million.

The Sell-Side Reacts

Deutsche Bank analyst Carlo Santarelli maintained a Buy on Wynn and lowered the price target from $183 to $123.

Acceptable Q3 results were rendered moot after the earnings call commentary described Macau as "murky," "choppy" and "sporadic," the analyst said.

“With the exception of Las Vegas, which we had previewed as being considerably weaker than consensus, we felt Q3 Macau results were broadly better than expectations, with property EBITDA of $409 million coming in ahead of consensus and our forecast.”

Morgan Stanley analyst Thomas Allen maintained an Equal-Weight on Wynn and lowered the price target from $139 to $130.

“Wynn is suffering from being most exposed to high-end Chinese players and as a result, will suffer in a weaker macro backdrop,” the analyst said. 

Jefferies analyst David Katz maintained a Hold on Wynn and lowered the price target from $170 to $114.

The roughly in-line quarter was overshadowed by pessimistic commentary on the high end of the Macau market, weighing on shares, he said. 

“While pressures may be temporary, historically limited visibility in Macau warrants the conservative stance on our estimates and valuation going forward. The pending growth in Las Vegas and Boston provide some balance, with impact to the earnings expectations for these properties being a gating factor for further downside.”

Credit Suisse analyst Cameron McKnight maintained a Neutral on Wynn and lowered the price target from $119 to $104.

Forward indicators are pointing to decelerating growth next year, the analyst said, leading Credit Suisse to lower 2018, 2019 and 2020 estimates. 

“Wynn’s Q4 outlook is 20 percent below consensus and suggests WYNN is losing market share and/or the Macau market has turned sharply negative in November and December.”

The Price Action

Wynn shares were down 12.24 percent at $100.04 at the time of publication Thursday. 

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