KeyBanc Downgrades Wynn Resorts (WYNN) to Underweight
WYNN Hot Sheet
Rating Summary:12 Buy, 6 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23
KeyBanc downgrades Wynn Resorts (NASDAQ: WYNN) from Hold to Underweight with a price target target of $21, after announcing substantial labor cost cutting initiatives for its Las Vegas properties.
KeyBanc analyst says, "After the close WYNN announced substantial labor cost cutting initiatives for its Las Vegas properties. This is the first time we can ever remember this management team taking such drastic measures. In addition, on a conference call Steve Wynn commented that spending (labor, marketing, promotions, etc.) on the Encore opening was of a magnitude consistent with a boom time economy. These two data points combined with a severe recessionary climate in both of WYNN's markets cause us to lower our 4Q08 earnings estimate and reevaluate our investment opinion on these shares. We are lowering our 4Q08 EPS estimate to $0.40 from $0.45 (consensus is at $0.52) and believe there are few companies in the gaming sector with near term prospects and catalysts. Longer term, Wynn Resorts has among the best growth pipelines in the industry. Between 150 well located acres in Las Vegas and a 52-acre site on the Cotai strip in Macau, WYNN should be set for the next five to 10 years growth. That being said, the skittish investment climate today does not augur well for any gaming company and we are afraid WYNN's shares will under perform over the near term."
Wynn Resorts, Limited (Wynn Resorts) is a developer, owner and operator of destination casino resorts.
KeyBanc analyst says, "After the close WYNN announced substantial labor cost cutting initiatives for its Las Vegas properties. This is the first time we can ever remember this management team taking such drastic measures. In addition, on a conference call Steve Wynn commented that spending (labor, marketing, promotions, etc.) on the Encore opening was of a magnitude consistent with a boom time economy. These two data points combined with a severe recessionary climate in both of WYNN's markets cause us to lower our 4Q08 earnings estimate and reevaluate our investment opinion on these shares. We are lowering our 4Q08 EPS estimate to $0.40 from $0.45 (consensus is at $0.52) and believe there are few companies in the gaming sector with near term prospects and catalysts. Longer term, Wynn Resorts has among the best growth pipelines in the industry. Between 150 well located acres in Las Vegas and a 52-acre site on the Cotai strip in Macau, WYNN should be set for the next five to 10 years growth. That being said, the skittish investment climate today does not augur well for any gaming company and we are afraid WYNN's shares will under perform over the near term."
Wynn Resorts, Limited (Wynn Resorts) is a developer, owner and operator of destination casino resorts.
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