It’s been a while since Wall Street analysts tagged casino stocks with “sell” ratings. But Wynn Resorts (NASDAQ:WYNN) is enduring that fate today at the hands of Citi.

In a note to clients today, Citi analyst George Choi pared his rating on the Encore operator to “sell” from “buy.” This is a double downgrade because it skipped over a “neutral” grade. Choi also lifted his price outlook on the gaming company to $99 from $88. That’s about $11 below where the shares currently trade.

With its Macau subsidiary’s high exposure to VIPs, it’s hard to justify the 12.4x 2-year forward enterprise value/earnings before interest, taxes, depreciation and amortization (EBITDA) multiple that it’s currently trading at,” said Choi.

The analyst is positive on Macau’s recovery trajectory, which is integral to the Wynn equity thesis because the Chinese territory is the operator’s largest market. However, Choi points to travel restrictions remaining in place for much of the first half of 2021 as potentially dampening the special administrative region’s (SAR) rebound effort. He added that gross gaming revenue (GGR) there this year will reach just 53 percent of 2019 levels.

Still Some Support
Entering 2021, the Wynn Macau and Wynn Palace operator is one of Wall Street’s preferred names for tapping into a resurgence. This confirmed that Choi’s “sell” call on the name is a departure from consensus.

Prior to that rating being revealed today, eight analysts had bullish or very bullish grades on Wynn stock, while another eight rated the name “neutral.” Choi’s $99 price target is nearly $7 below the consensus of $105.93.

Analysts constructive on the stock highlight break-even EBITDA at the two Macau integrated resorts in October and November while noting Wynn, usually viewed through the VIP lens, can benefit from increased traffic among mass and premium mass players.

In the US, the company runs its namesake integrated resort and Encore on the Las Vegas Strip, and Encore Boston Harbor. But recovery timelines for those venues are murkier, owing to a recent spike in coronavirus cases across the US.

MGM, Too
Wynn isn’t the only gaming equity drawing Choi’s wrath today. The Citi analyst also lowered his grade on MGM Resorts International (NYSE:MGM) to “neutral” from “buy.” But he did lift his price target on the Mirage operator to $32 from $24. That’s unlikely to draw much fanfare among investors because the stock flirts with $31 at this writing.에볼루션 바카라사이트

Choi says enthusiasm for the proposed Entain Plc (OTC:GMVHY) acquisition is already priced into MGM stock.

On Monday, the Bellagio operator made an $11.06 billion bid for its partner in the BetMGM business. But the British company rejected the offer, saying it undervalues the firm. It remains to be seen if the casino giant will up its proposal for the owner of the Ladbrokes and Coral sportsbook brands.

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