The opening of Wynn Palace in August will be a key inflection point for the company, said a note from Bernstein on Friday.
Bernstein analysts say although there will be some cannibalization of its existing operations in the short term, the new opening will position the company to be a market share taker with long-term growth prospects.
“We believe Wynn Macau is one of the premier operators in Macau with best-in-class management that is delivering outsized performance,” said Bernstein. “Wynn Macau benefits partially from being situated in the Macau Peninsula casino cluster.This “cluster effect” enables Wynn Macau to capture gaming patrons from neighboring properties as it positions itself as a premium product that is also highly aspirational.”
Wynn Palace will also provide the company with robust long-term growth prospects, and may likely be the most iconic property in the market, continued Bernstein.
In relation to VIP performance, Bernstein estimates market share for VIP to increase by over 300 basis points from 2015 to 2018 while mass share is projected to increase by over 400 basis points during this period.
“Further, we forecast the company’s EBITDA to grow at 24 percent compound annual growth rate in the period.”
In an investor presentation, the company said the US$4.1 billion Wynn Palace resort could earn as much as US$850 million in EBITDA by 2017.