WYNN stock was trading at $58.80 at close: October 21, 04:00 PM EDT
In response to China’s demonstration that the long-standing COVID zero-tolerance policy is still very much in force, the Macau casino industry is reeling again. All schools and eateries in Guangzhou’s business district will be closed on Monday, according to earlier announcements from government authorities, in an effort to contain the unexpected increase of positive cases. After President Xi Jinping was re-elected at the communist party meeting, that decision was made just a few days later. There had been some optimism that Beijing would relax its limitations in the wake of the summit.
During Monday’s premarket trading, shares of Wynn Resorts (NASDAQ:WYNN) and Melco Resorts & Entertainment (NASDAQ:MLCO) both had declines of 9.39% and 6.36%, respectively. In the midst of widespread selling pressure in China related to worries about economic growth. Despite CFRA Research upgrading the casino stock’s rating from Hold to Buy, Las Vegas Sands (NYSE:LVS) lost 8.65% in the early session.
Zachary Warring is a researcher. With $343 million in adjusted EBITDA during the most recent quarter, Marina Bay Sands in Singapore is the casino operator’s lone bright light. “Although the Covid-19 lockdowns over the previous two years have hurt LVS’s balance sheet, the business has a ton of cash now that The Venetian has been sold, and we now anticipate continued progress in Macao over the next 12 months, bringing EBITDA up to roughly 60% of pre-pandemic levels. In a challenging operating climate in Macao, LVS has done well to minimize costs, and we think that the risk now favors the upside for shares.”
Stock Forecast
The firm raised its 12-month price target to $43, which is in line with the company’s 10-year average forward EV/EBITDA multiple and works out to 13.9X the 2023 EBITDA forecast. Credit Suisse downgraded Melco Resorts & Entertainment (NASDAQ:MLCO) because profits would likely be impacted by the company’s Zero-COVID strategy and a deteriorating consumer.
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Author Jowi Kwasu 
