Casino and resorts operator Wynn Resorts (WYNN) reported better-than-expected second-quarter results. Rapid re-openings of the company’s resorts, along with the resumption of traveling and leisure activities by guests were the primary drivers.
For the second quarter, the company reported an adjusted loss of $1.12 per share, better than analysts’ estimated loss of $1.52 per share. In the prior-year period, Wynn had reported an adjusted loss of $6.14 per share.
Additionally, revenue came in at $990.11 million, marking a substantial increase over the year-ago quarter’s revenue of $85.7 million. The company also beat analysts’ estimates of $958.46 million.
Notably, Wynn Resorts’ fiscal year 2020 results took a major hit due to the COVID-19 pandemic-related partial/full closures of properties. However, in 2021, it has witnessed accelerated re-openings for most of its properties, primarily in Las Vegas and Encore Boston Harbor. (See Wynn Resorts stock charts on TipRanks)
Commenting on the improving scenario, Matt Maddox, CEO of the company said, “We were pleased to see the strong return of our guests at both Wynn Las Vegas and Encore Boston Harbor during the second quarter with Adjusted Property EBITDA at our U.S. operations well above pre-pandemic levels, highlighting the significant pent-up demand for travel and leisure experiences.”
Moreover, elaborating on the progress of the company’s online casino and sports betting app WynnBET, Maddox stated, “We continue to enhance our product with frequent new feature releases and are advancing our marketing and branding strategy as we approach the upcoming NFL 2021 season.”
Following the better-than-expected quarterly results, Deutsche Bank analyst Carlo Santarelli maintained a Buy rating on the stock with a price target of $140 implying 42.7% upside potential to current levels.
Santarelli said, “We believe a WYNN investment is an investment in the medium to longer-term resumption of operations and return to normalized demand in Macau, something we believe is likely.”
Furthermore, considering the current strength in the domestic portfolio and minimal cash burn, the analyst believes “the balance sheet will remain relatively akin to its present status, should Macau conditions remain challenged through year-end, as we forecast.”
Based on four Buys and two Holds, the stock has a Moderate Buy consensus rating. The average Wynn Resorts price target of $133.33 implies 41% upside potential to current levels. Shares have gained 32.5% over the past year.
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