Why Wynn Resorts Stock is Losing Amid Covid-19

August 25, 2020

Wynn-Resorts-stock

One of the places where investors have been battered so far this year is in casino stocks. However, yesterday provided some relief as key gaming operator Wynn Resorts Ltd (NASDAQ: WYNN) saw shares surge 4.8%.

The company has been on a massive losing streak as stay-home orders in the US, and travel restrictions on mainland Chinese visitors in Macau dealt a double whammy to its business.

However, the stock is still down about 50% so far in 2020 (although it has doubled from its March low). The company’s latest quarter detailed the damage in more detail with revenue down an unbelievable 95%. 

This spurred a loss of US$523 million for the period versus a US$219 million operating income for the year-ago period.

Competitors such as Las Vegas Sands Corp (NYSE: LVS) and MGM Resorts International (NYSE: MGM) are in the same boat yet Wynn relies more on the high rollers in its Macau offering.

However, the recent news that China was reinstating tourist visas to Macau from 23 September has provided a welcome boost. 

Wynn may not get back to its previous levels in a hurry but the start of the long road to recovery at least looks to be in sight.  

This material is categorised as non-independent for the purposes of CGS-CIMB Securities (Singapore) Pte. Ltd. and its affiliates (collectively “CGS-CIMB”) and therefore does not provide an impartial or objective assessment of the subject matter and does not constitute independent research. Consequently, this material has not been prepared in accordance with legal requirements designed to promote the independence of research. Therefore, this material is considered a marketing communication.

This material is general in nature and has been prepared for information purposes only. It is intended for circulation amongst CGS-CIMB’s clients generally and does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this material. The information and opinions in this material are not and should not be construed or considered as an offer, recommendation or solicitation to buy or sell the subject securities, derivative contracts, related investments or other financial instruments or any derivative instrument, or any rights pertaining thereto. CGS-CIMB have not, and will not accept any obligation to check or ensure the adequacy, accuracy, completeness, reliability or fairness of any information and opinion contained in this material. CGS-CIMB shall not be liable in any manner whatsoever for any consequences (including but not limited to any direct, indirect or consequential losses, loss of profits and damages) of any reliance thereon or usage thereof.

Tim Phillips

Tim, based in Singapore but from Hong Kong, caught the investing bug as a teenager and is a passionate advocate of responsible long-term investing as a great way to build wealth.

He has worked in various content roles at Schroders and the Motley Fool, with a focus on Asian stocks, but believes in buying great businesses – wherever they may be. He is also a certified SGX Academy Trainer.

In his spare time, Tim enjoys running after his two young sons, playing football and practicing yoga.

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