Wynn, Sands both a long-term play: Morningstar

Wynn Macau stocks will suffer over fears of a weak economy and construction disruption at its properties in Macau, but has long-term growth potential, said analysts from Morningstar.

While there will be pressure on earnings on the near term, Morningstar believes there is long-term growth potential for the group  – namely due to the new premium mass area in the peninsula launching at the end of this year, along with two hotel towers with over 1,200 rooms in Cotai, which begins construction in 2020.

Similarly, Morningstar notes that Sands China is expected to see earnings deteriorate as a result of the slowing economy.

Construction for the new St. Regis tower suites, the rebranding of Sands Cotai Central to The Londoner and the closing of Holiday Inn after Chinese New Year, is also set to add another layer of weakness to Sands China’s earnings in 2019, it added.

However, as the disruptions are set to occur mostly within this year, Sands may see better performance once its under-construction properties are completed.

“In the long term, we do not doubt that the Londoner will deliver better performance than Sands Cotai Central and expect it will be key to maintaining market share against the opening of Galaxy phases 3 and 4,” added the brokerage.