Today, Wynn Resorts Ltd (NASDAQ:WYNN) disclosed an adjustment to the conversion price of the convertible bonds issued by its indirect subsidiary, Wynn Macau (OTC:WYNMF), Limited (WML). The change, effective September 4, 2024, reflects the payment of dividends to WML shareholders.
The conversion price of the 4.50% convertible bonds due 2029 will be revised from HK$10.24375 to HK$10.01212. This adjustment follows WML's distribution of a final dividend of HK$0.075 per share for the year ended December 31, 2023, and an interim dividend of HK$0.075 for the six months ended June 30, 2024.
Wynn Resorts, which owns approximately 72% of WML's ordinary shares, has confirmed that aside from the conversion price, all other terms of the convertible bonds remain unchanged. The announcement was made in compliance with the Hong Kong Stock Exchange regulations, where WML's ordinary shares are listed.
In other recent news, Wynn Resorts has been making notable strides in its financial performance and global expansion plans. The company reported a record second-quarter EBITDA of $572 million, attributed to strong performances across its properties in Las Vegas, Boston, and Macau, and a significant reduction in gross debt by over $1.1 billion in the past year.
Deutsche Bank recently adjusted its outlook on Wynn Resorts, reducing the price target to $122 from $131, but reaffirmed a Buy rating for the stock, highlighting the attractiveness of Wynn Resorts' shares at current market levels.
The revised target price is based on modest revisions in Macau's operations, but Deutsche Bank suggests that the current valuation does not fully reflect the inherent value of Wynn Resorts' domestic assets.
The bank also pointed out that the price target does not account for potential future cash flows from operations in the United Arab Emirates, which could add approximately $14 per share in present equity value to Wynn Resorts.
In addition to its financial achievements, Wynn Resorts has its sights set on global expansion, particularly in the UAE, with plans to finalize debt financing for the Wynn Al Marjan Island project in 2024.
The company is also optimistic about the fourth quarter, citing upcoming events like the F1 race and strong ADR growth. These recent developments underscore Wynn Resorts' strategic focus on high-value customer experiences and its potential for growth in high-potential markets.
InvestingPro Insights
As Wynn Resorts Ltd (NASDAQ:WYNN) makes adjustments to its convertible bond conversion prices, investors may find additional context in the company's financial health and market performance useful. According to InvestingPro data, Wynn Resorts currently has a market capitalization of $8.34 billion and has shown impressive revenue growth of 44.65% over the last twelve months as of Q2 2024. This growth is underscored by a substantial gross profit margin of 69.02%, indicating strong operational efficiency.
Investors should also note that Wynn Resorts' stock has been trading near its 52-week low, which, in combination with a P/E ratio of 9.79, may signal a potential value opportunity for those who believe in the company's profitability outlook. Notably, analysts have revised their earnings expectations upwards for the upcoming period, and the company is predicted to be profitable this year. For those interested in exploring Wynn Resorts' potential further, there are additional InvestingPro Tips available, including insights on shareholder yield and stock price volatility, at https://www.investing.com/pro/WYNN.
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