Everyone wants slice of Wynn after company earnings rise

Wynn Resorts Ltd. shares reached a high for the year Friday before settling back down with an almost 8 percent gain in heavy trading, a day after the company came out ahead of analyst predictions in its quarterly and annual earnings report.

The Las Vegas-based casino operator rebounded from a loss of $45.2 million in the fourth quarter of 2009 to a $114.2 million profit for this year. Operating revenue rose 79 percent to $912.5 million, while revenues in Macau came in at $1.24 billion.

"We are upping our already above-consensus 2011 and 2012 property-level (earnings) estimates by 3 percent and 6 percent, respectively, and believe our estimates are reasonably based, allowing for further upside in Macau," said Joseph Greff, an analyst with JP Morgan, in a note to clients.

Greff boosted his year-end price target on Wynn shares to $140 from $127. He expected Wall Street estimates and price targets to move up as well.

Shares of Wynn Resorts gained $8.95, or 7.45 percent, to close at $129.10 on volume of 5.64 million shares traded on the Nasdaq Global Select Market. The casino operator controlled by developer Steve Wynn trades about 2.25 million shares on average.

The company's stock also set a 52-week high on Friday when it reached $129.37 within about an hour of the opening bell.

"The strong earnings results, together with indications of continued robust dynamics in Macau, stabilizing trends in Las Vegas, ongoing development plans in Cotai ... support out bullish stance on the story," said David Katz, an analyst with Jefferies.

Katz reiterated his "buy" rating, while David Bain of Sterne Agee maintained his "neutral" stance on the company's shares.

While continuing to position Wynn as top in its class, Bain remained "somewhat concerned" that the company's Macau properties may generate less earnings growth than Cotai given the "near term increase in product offerings."

He also cautioned that while Las Vegas continues to improve, he was concerned that "expectations may be ahead of themselves for a significant recovery."

Despite his caution, Bain upped his earnings estimates to $1.31 from $1.22 per share for 2011 and to $1.41 a share from $1.30 for 2012. He said most of the change for this year reflects the higher estimates in Macau.

Contact reporter Chris Sieroty at
csieroty@reviewjournal.com or 702-477-3893.