Stifel Financial (NYSE:SF) Corp has adjusted the price target for Wynn Resorts, Limited (NASDAQ: NASDAQ:WYNN), reducing it to $103 from the previous $121.
Despite the reduction, the firm maintained its Buy rating on the casino operator's shares. The revision comes amid a notable decline in the company's stock value, which has seen a roughly 17% drop year-to-date, underperforming the S&P 500's 17% gain over the same period.
Wynn Resorts' stock has been under pressure due to its significant exposure to the Macau gaming market, which is currently facing controversy. The analyst from Stifel acknowledged the general reluctance among investors to engage with stocks heavily tied to Macau or China, given the uncertainties surrounding the Chinese economic environment. However, the firm believes that the current market valuation of Wynn Resorts excessively discounts the value of the company's Macau assets and its project in the United Arab Emirates.
In response to the challenging operating conditions, Stifel has revised its earnings estimates for Wynn Resorts, encompassing both its Macau and Las Vegas operations. The new estimates take a conservative stance, factoring in the potential for a more uncertain future. Despite the lowered expectations, Stifel suggests that the current trading levels of Wynn Resorts' shares are very attractive. The firm encourages investors to take advantage of the recent weakness to accumulate shares.
The updated price target of $103 implies an approximate 35% upside from the current trading levels, indicating Stifel's confidence in the intrinsic value of Wynn Resorts despite the market's bearish sentiment towards the company's prospects in Macau and the broader Chinese market.
InvestingPro Insights
In light of Stifel Financial Corp .'s recent price target adjustment for Wynn Resorts, Limited (NASDAQ:WYNN), it's worth considering additional insights from InvestingPro. A key InvestingPro Tip for Wynn Resorts is the company's impressive gross profit margins, which stand at 69.02% for the last twelve months as of Q2 2024. This figure underscores the company's ability to maintain profitability despite challenging market conditions. Additionally, Wynn Resorts has been recognized for its high shareholder yield, a metric that combines dividend payments and share repurchases to show the total payout to shareholders.
From a data perspective, Wynn Resorts' market capitalization is currently at $8.39 billion, and the stock is trading near its 52-week low, which may present a buying opportunity for investors seeking value. The company's Price/Earnings (P/E) ratio is at 9.78, and the adjusted P/E ratio for the last twelve months as of Q2 2024 is 8.53, suggesting a potentially undervalued stock relative to its earnings. Moreover, Wynn's revenue growth of 44.65% over the last twelve months indicates a strong recovery trajectory.
Investors looking for further analysis and metrics on Wynn Resorts can find additional InvestingPro Tips at https://www.investing.com/pro/WYNN. With several analysts predicting profitability for the company this year and a fair value estimate by analysts at $115, compared to the current price of $76.26, the potential for upside remains a key point for potential investors to consider.
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