Wynn Macau estimates lowered on weaker high-end

Analysts from Bernstein on Monday said they have reduced their 2019 EBITDA estimates for Wynn Macau by 6 percent, reflecting weaker high-end volumes. 

Bernstein said that Wynn Macau, and Wynn Resorts have both seen a softer than originally expected Q3, due to low hold in direct VIP and overall soft high-end volumes. 

The analysts have also reduced its estimates for Wynn Macau’s 2020-2023 EBITDA by 2 percent. 

Bernstein said this is a result of near-term macro factors, including China’s slowdown, RMB depreciation, and trade war headwinds. 

For Wynn Resorts as a whole, Bernstein said it expects 19Q3 EBITDA to come in at $356 million, down 23 percent year-on-year, while Wynn Macau’s EBITDA will reach HK$2 billion, down 28 percent year-on-year.

“We believe the softness in Wynn’s July and August performance has not yet been fully modeled in by the sell-side, but investors have reduced expectations significantly already. As such a weak result for Q3 is widely expected; however, a miss of larger magnitude than we are estimating may lead to selling pressure. However, we would be buyers on any weakness,” said the brokerage. 

Along with revising its estimates downwards, Bernstein said it has also reduced Target Prices, driven by a reduction in estimates. 

“We remain positive on the long-term growth potential of both Wynn Macau (drive-by eventual high-end recovery) and by stable growth at Wynn Las Vegas and ramp up growth of Wynn’s new Boston property. Although we acknowledge that Macau continues to face near term headwinds,” said Bernstein.