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Stock Analyst Update

Wynn Resorts Unchanged With Departure of Founder

We are maintaining our narrow moat rating and $166 fair value estimate.


With the announcement that Steve Wynn will be stepping down as CEO of  Wynn Resorts (WYNN), we reiterate our previous stance that the company's design quality is unlikely to be affected, which in part was based on an executive bench that included former president Matt Maddox, who now becomes CEO. Our view that Wynn Resorts is likely to retain its gaming licenses is buoyed by Steve Wynn's removal, in our opinion, given that gaming commission investigations of suitability appear to be centered on allegations against the company founder. Further, his decision to resign also could reduce risk around a tarnishing of brand reputation. As a result, we are maintaining our narrow moat rating and $166 fair value estimate.

We do not expect the firm's capital allocation strategy, which includes dividends, buybacks, and development projects, to change under Maddox, and we have confidence he'll be able to support the company's brand intangible asset (the source of its narrow moat), given that he has been an integral employee of Wynn Resorts since 2002.

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

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