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Commentary

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.

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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.

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Dan Wasiolek does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.