Analyst Note| Dan Wasiolek |
Like peers, narrow-moat Wynn is seeing both Macau (76% of 2019 EBITDA) and U.S. (24%) demand accelerate in recent months, harmonizing with our forecast. But we think the main takeaway for investors from first-quarter results is that Wynn announced its sports betting and iGaming platform, Wynn Interactive, annualized gross gaming revenue at around $103 million in March, up from $48 million in December, with guidance for this to reach around $700 million in 2023 revenue (around 11% of total estimated sales). When the merger with Austerlitz closes by the end of this year, it will provide $640 million to invest behind the business. Given this strength we plan to increase our outyear sales forecast for Wynn Interactive, leading to around a mid-single-digit percentage increase to our Wynn $110 fair value estimate, leaving shares still overvalued.