Wynn Resorts Faces Analyst Downgrades Following Weak Third-Quarter Earnings
Zacks Research downgraded Wynn Resorts to strong sell after the casino operator missed quarterly earnings and revenue projections, though broader analyst consensus remains Moderate Buy.
Wynn Resorts, Limited faced renewed pressure from equity analysts following its latest financial results, with Zacks Research lowering its rating on the casino operator from hold to strong sell. The move follows recent rating and price target reductions from several brokerages after the company missed consensus estimates for its third quarter.
On November 5th, Wynn Resorts reported quarterly earnings per share of $0.33, missing the consensus forecast of $0.52 and falling sharply from $0.86 per share in the prior-year period. Quarterly revenue fell 7.9% year over year to $1.69 billion, missing expectations of $1.75 billion. The company reported a net margin of 5.20% and a negative return on equity of 42.73%, while Wynn Macau saw operating revenue drop 8.2% to $919 million amid headwinds in the VIP market.
The earnings shortfall prompted a wave of revisions across Wall Street. Citigroup reduced its price target from $103.00 to $100.00 while maintaining a buy rating, and Wells Fargo lowered its target from $125.00 to $122.00 with an overweight rating. Wall Street Zen also cut its stance from hold to sell. Despite the downgrades, data from MarketBeat shows Wynn Resorts retains an overall consensus rating of Moderate Buy, with an average target price of $120.88.
Looking beyond quarterly results, analysts at CBRE Credit Research noted that the scheduled September 2027 opening of the US$5.7 billion Wynn Al Marjan Island resort in the United Arab Emirates could substantially strengthen the company's financial footing. CBRE projected that Wynn's lease-adjusted leverage could fall to around 5.0x once operational, potentially triggering credit rating upgrades from agencies including Moody's, S&P, and Fitch.
Wynn Resorts management also stated during a recent earnings call that it is considering development options for an undeveloped 38-acre parcel on the Las Vegas Strip and identified Texas and Georgia as potential expansion targets if commercial gaming legislation allows. Meanwhile, the board declared a regular quarterly dividend of $0.25 per share, scheduled for payment on November 30th to shareholders of record as of November 16th.