Analysts at Morgan Stanley believe that Wynn Resorts’ new project in the UAE could lead to an increase in the company’s stock value.
In a report that upgraded Wynn’s rating to “Overweight” with a 12-month target price of $104, it is noted that investors are currently undervalued the potential of the UAE. Analysts estimate that the property in the UAE could generate approximately $1.8 billion in total revenue and $500 million in EBITDA by its third year of operation.
These figures could compete with Wynn Las Vegas, which generated $2.5 billion in revenue and $945 million in EBITDA last year.
Analysts have valued the UAE project at $12 per share, which could increase Wynn’s stock value by 10–20%.
The company’s expansion in the UAE looks particularly promising due to the favorable demographic situation in the country and the fact that Wynn will be the only operator in the market for at least the first 3–5 years.
Analysts noted that new markets with limited supply have traditionally yielded significant profits.
Wynn plans to provide more detailed information about the UAE project at an analyst event scheduled for October 8.
Morgan Stanley also highlighted several other factors that could influence Wynn’s stock price, including the stability of the company’s assets in Las Vegas and the potential for increased returns on capital for shareholders.
Despite recent successes, Wynn’s shares continue to trade at a discount to their historical valuation.
Analysts pointed out the attractive risk-reward profile and the presence of several catalysts that could contribute to a reevaluation of the stock in the future.
However, the analysts also noted potential risks, including geopolitical tensions, consumer spending concerns in China, and the possibility of structural changes in the Las Vegas market.
The success of the project in the UAE will also depend on the completion of the development of gambling regulations in the country.
The operator expects that the Wynn Al Marjan Island resort in the emirate of Ras Al Khaimah will open in 2027, with an estimated construction cost of approximately $3.9 billion.
The project is being carried out in collaboration with the developer Marjan, and as of last month, Wynn had already invested $514.4 million in it.
The company remains optimistic about the project, announcing the purchase of additional land in the area for future development in its financial reports for the Q2.
Don’t forget to subscribe to our Telegram channel!
