WYNN: Positive Macau Trends Will Drive Luxury Demand Across Key Asian Markets

Key Takeaways

• Expansion into luxury international markets and unique destination openings are poised to fuel long-term revenue and margin growth amid rising global wealth.
  
• Premium guest experiences, property investments, and advanced technologies are expected to drive customer loyalty, operational efficiency, and sustained financial outperformance.
  
• Heavy dependence on Macau, rising operational costs, high capital spending, and intensifying competition all heighten financial risk and threaten long-term earnings stability.

Catalysts

Designs, develops, and operates integrated resorts.

• The rapid emergence of a larger, affluent middle class in Asia and the Middle East is driving increased demand for luxury integrated resorts, positioning Wynn's properties-especially Macau and the soon-to-open Wynn Al Marjan Island-to capture outsized growth in international gaming and hospitality spend, which is likely to result in higher long-term revenue and EBITDA growth.
  
• Wynn's ability to consistently command premium pricing and higher spend per visitor-evidenced by above-market room rates, resilient high-end gaming volumes, and solid retail and F&B metrics-signals that its focus on elite experiences and luxury offerings will continue to support net margin expansion and earnings outperformance as global wealth grows.
  
• The imminent launch of Wynn Al Marjan Island, with first-mover advantage and limited near-term competition in a potentially multi-billion-dollar new market, is a major forward catalyst that is currently underappreciated by investors and could drive a meaningful step-change in both consolidated revenue and EBITDAR.
  
• Ongoing investments in both property upgrades (e.g., Encore Tower Remodel, Chairman's Club expansion, event venue construction) and the integration of advanced marketing and operational technologies provide a platform for enhanced guest personalization and operational efficiency, potentially leading to increased customer retention and improved margins.
  
• The easing of travel restrictions and growth in international tourism, coupled with Wynn's robust forward group and convention bookings in Las Vegas, suggest a multi-year runway for occupancy and average rate improvement across core geographies, directly supporting sustainable top-line revenue and profitability growth.

Wynn Resorts Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Wynn Resorts's revenue will grow by 4.6% annually over the next 3 years.
• Analysts assume that profit margins will increase from 5.5% today to 7.8% in 3 years time.
• Analysts expect earnings to reach $624.0 million (and earnings per share of $6.15) by about September 2028, up from $383.9 million today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $515.3 million.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 24.6x on those 2028 earnings, down from 32.6x today. This future PE is greater than the current PE for the US Hospitality industry at 23.9x.
• Analysts expect the number of shares outstanding to decline by 5.4% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 11.22%, as per the Simply Wall St company report.

Wynn Resorts Future Earnings Per Share Growth

Risks

• Heavy reliance on Macau exposes Wynn Resorts to geopolitical risks (e.g., US-China tensions, regulatory/licensing uncertainty), which could impact revenue stability and net margins if market conditions deteriorate or new restrictions are introduced.
  
• Persistently rising labor, wage, and operating costs-especially in the US and Macau-along with union-related payroll pressures may constrain EBITDAR margins and put downward pressure on long-term earnings if revenue growth slows or occupancy declines.
  
• Aggressive capital expenditure programs across multiple regions (Las Vegas upgrades, Macau property refreshes, and large-scale investment in Wynn Al Marjan Island) increase financial risk due to high fixed costs and leverage, potentially impacting free cash flow and net earnings if project ROI underdelivers or market conditions soften.
  
• Increasing industry competition from new integrated resorts and gaming markets (including potential liberalization in Asia and development in UAE) threatens Wynn's market share, pricing power, and long-term revenue growth, particularly if high-end consumer demand becomes fragmented across more operators.
  
• Uncertainty around changing global travel, regulatory, and entertainment trends-such as the continued rise of online gaming alternatives and evolving consumer preferences toward non-gaming or more sustainable experiences-may reduce physical visitation and gaming spend, negatively affecting revenue and profitability over time.

Valuation

• The analysts have a consensus price target of $128.088 for Wynn Resorts based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $147.0, and the most bearish reporting a price target of just $110.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $8.0 billion, earnings will come to $624.0 million, and it would be trading on a PE ratio of 24.6x, assuming you use a discount rate of 11.2%.
• Given the current share price of $121.49, the analyst price target of $128.09 is 5.2% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.