How Wynn UAE Casino Resorts Could Propel Shares

Key Highlights of Premier Casino Resorts:

• Analysts show increasing confidence in Wynn’s UAE casino resort
• UBS upgrades the stock based on optimistic forecasts for the UAE opportunity
• There are indications that Wynn’s forecasts may be too conservative

---

Wynn Resorts’ (NASDAQ: WYNN) Wynn Al Marjan Island is garnering attention as a potential long-term catalyst for increased share value, as more analysts focus on its significance in the gaming market. Recognized for its anticipated role as the inaugural regulated gaming venue in the Middle East, Wynn’s move into the UAE is a topic of growing interest among sell-side analysts.

On Thursday, UBS analyst Robin Farley revised Wynn’s rating from “hold” to “buy,” due to optimism surrounding the UAE estate. Farley notes that they forecast run-rate adjusted property earnings before interest, taxes, depreciation, amortization, and management fees (EBITDAM) of $730 million, exceeding Wynn’s own estimates that hover around $625 million. “We foresee a strong head start in building loyalty among ultra high net worth international customers being the sole gaming operator in the UAE,” Farley elaborated.

In her analysis, Farley’s augmented price target for Wynn now sits at $147, a notable increase from the previous $101, suggesting a potential upside of nearly 16% from its current price levels. Notably, shares of Wynn have surged 47.24% year-to-date, and recently hit a 52-week high.

The UAE Casino Could Exceed Estimates

Wynn’s UAE property is recognized as a significant opportunity, with alluring long-term growth projections. However, some analysts suggest that the forecasts might be too conservative. Farley suggests that her EBITDAM estimate of $730 million is likely closer to the high end of Wynn’s projected range, which spans from $500 million to $800 million. Industry experts believe that the UAE could evolve into the fourth-largest gaming market globally, trailing only Macau, Las Vegas, and Singapore.

If other emirates follow suit in approving casino gaming, it’s plausible that the UAE as a whole could achieve a staggering $3 billion to $5 billion in annual gross gaming revenue (GGR). For Wynn, having a multi-year monopoly on the Al Marjan Island will permit it to create a strong brand loyalty with both affluent visitors and locals traveling to the UAE.

According to UBS evaluations, Wynn Al Marjan Island might be valued at $34 per share, a significant rise from its current share price’s implication of $7 to $12, reflecting the promising future projections along with the anticipated economic contributions from the gaming industry.

The Macau Connection

As the UAE casino hotel prepares for a 2027 opening, the company is also seeing a revitalization in Macau, where gross gaming revenues (GGR) are rebounding to pre-pandemic levels. UBS has revised growth forecasts for Macau’s GGR, predicting increases of 8% and 5% for this year and next, respectively.

Consequently, Wynn is likely to maintain, or even improve, its solid positioning among premium mass bettors and VIP clients. Farley’s valuation for Wynn’s Macau business has also been increased from $49 to $76 per share, indicative of positive sentiments surrounding the evolving casino landscape in both regions.

---

Summary: The projected outlook for Wynn Resorts highlights promising growth, particularly with the anticipated launch in the UAE. Analysts are increasingly supportive, indicating strong potential for higher property earnings and increased share value. The strategic emphasis on premium services and exclusive brand loyalty positions Wynn favourably in the competitive gaming landscape, especially as Macau also rebounds, enhancing overall investor confidence.

Related guide: Play now