After catching the market off guard with its 67 percent dividend cut and top and bottom-line earnings misses, shares of Wynn Resorts, Limited WYNN 2.11% crashed more than 16 percent following its Q1 earnings report.
Here’s a look at what three Wall Street firms have to say about Wynn following its earnings.
Morgan Stanley
Analysts certainly noted the importance of the earnings miss and the surprise dividend cut, but they were also blindsided by Wynn’s outlook for Las Vegas. Wynn’s outlook for Vegas included a “weak” Q2, a softer-than-expected summer, and an overall “tepid” outlook for the Vegas environment.
Analysts noted that the one positive from Wynn’s guidance was its target date of March 2016 for the opening of Wynn Palace in Cotai.
Morgan Stanley maintains its Equal-Weight rating on Wynn, but lowered its price target from $143 to $130.
Brean Capital
Brean analysts called Wynn’s earnings “downright ugly.” Analysts focused on Wynn’s 52.3 percent year-over-year drop-off in VIP turnover and 7.0 percent year-over-year decline in mass market turnover. Brean is now projecting gross gaming revenue (GGR) growth at Wynn Macau of -24.5 percent and -14.8 percent in 2Q15 and 3Q15, respectively, before gaming revenue growth bounces back by 7.0 percent in 4Q15.
Brean maintained its Buy rating on Wynn, but lowered its price target from $174 to $153.
Deutsche Bank
Analysts at Deutsche bank called Wynn’s earnings “tough to swallow” and believe that the long-term outlook for the company hinges on the success of Wynn Palace.
Interestingly, analysts believe that Wynn’s weakness in Vegas was specific only to Wynn’s properties, and Deutsche Bank recommends buying MGM Resorts International MGM 0.19% on any Wynn-related weakness between now and the company’s earnings date on May 4.
Deutsche Bank maintained its Buy rating on Wynn, but cut its price target from $156 to $135.
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