Deutsche Bank Still Buying Wynn, Hikes Target To $94

Deutsche Bank’s Carlo Santarelli maintained a Buy rating for Wynn Resorts, Limited WYNN, while raising the price target from $82 to $94. The analyst expressed optimism regarding the company’s long-term prospects.

Although Wynn Resorts’ current stock valuation appears high and things could “get a bit choppy post the analyst event,” there is reason to remain longer-term bullish, especially given the Cotai project, for which there is sufficient room for upward revisions, analyst Carlo Santarelli stated.

The company’s recent move appears to be “too much too soon,” given continued uncertainty in Macau fundamentals and lack of visibility around China’s macro policies.

Estimate Revisions

The 1Q16 and out period Macau forecasts have been raised to reflect steadying mass table performance, inflecting slot trends, sequential VIP volume growth and favorable February hold. Santarelli expects Wynn Resorts’ margins to remain under pressure in 1Q16, although mass mix and 2H labor shifts are likely to soften the margin contraction over time.