Wynn Resorts Still Worth a Gamble?
Although the narrow-moat firm's recent table allocation for its new casino came in below our forecast, we think shares are undervalued.
Our $125 fair value estimate may be reduced a few dollars after narrow-moat Wynn Resorts received a 100-table allocation for its Palace casino opening Aug. 22, which will be followed by an additional 25 tables at the start of both 2017 and 2018, resulting in a total initial allocation of 150 tables.
The 150-table allocation is below our forecast for 250, but will be offset by an incremental 42 tables at Peninsula that we hadn’t modeled, a Palace slot allocation of 1,145 versus our forecast for 800, current underutilization of the existing table base, and casino analytics.
Dan Wasiolek does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.