Despite current economic adversity, Deutsche Bank analyst Carlo Santarelli placed a Buy rating on Wynn Resorts stock. He lopped his price target from $129 per share to $110 in his April 9 investor note. Wynn stock closed Wednesday at $75.83 per share.
Santarelli began by observing that he didn’t expect much upside in 2025 first-quarter-earnings reports. That said, he deemed the first quarter to have held up well for Wynn in Las Vegas “and we believe current concerns around international patronage to Las Vegas, and the impact that could have on Wynn Las Vegas, are overdone.”
By contrast, Santarelli conceded that while he had expected Macau-derived gross gaming revenue to rise four percent in the first quarter, it was tracking one percent down from 2024. He blamed poor January hold and lower market share at Wynn’s Macanese casinos. Still, he felt Macau is “broadly stable.”
Santarelli allowed that larger economic forces may have slowed business in Macau. Noting the sub-zero growth, he wrote, “While the modest growth is disappointing, we think the broader concern is what we believe is likely a negative [year-over-year] comparison in the higher-margin mass segment.
“Broadly speaking, we see WYNN shares as relatively inexpensive, from nearly any valuation perspective,” the analyst continued. He pointed out that no value was being ascribed to Wynn’s United Arab Emirates project, which he believed to be worth an extra $16 per share.
Returning to the Las Vegas front, Santarelli observed that Wynn Las Vegas and Wynn Encore had faced a difficult comparison for Super Bowl weekend. The 2024 event gave Wynn a $25 million cash-flow boost.
Even so, Wynn had held up well, helped by strong group business. “Importantly, Wynn Las Vegas will be lapping higher-than-normal promotions, which were due in part to the elevated hotel room rates stemming from the Super Bowl.”
Investors, Santarelli ceded, “have become jittery around the impact of geopolitical tensions on international travel.” Although he expected casino operators on the Las Vegas Strip to be aware of this, he didn’t anticipate that anyone would talk about it openly.
Even so, he didn’t think the geopolitical maelstrom would negatively impact Wynn’s overseas high-roller custom in any meaningful way. He projected no material effect in early 2025, although he saw Las Vegas business for Wynn dimming 1.5 percent in the remainder of the year through 2026.
