Gaming | Wynn shares drop on back of Nomura speculation

Wynn Resorts, which opened its second property in the territory last month, saw its shares drop after market analyst Nomura speculated that mass-market gaming volumes at the Wynn Palace are not as strong as expected.
“Wynn has indicated that its business levels at Wynn Macau have not been affected by the [August 22] opening of Wynn Palace,” Nomura analyst Harry Curtis said in a statement. “While positive for Wynn Macau, indications are that mass volumes at Palace are lighter than expected.”
Wynn Resorts has declined to directly comment on the matter, saying only that the company will provide “actual numbers at the appropriate time.”
Despite the opening of Sands China’s The Parisian last week, Nomura analysts are saying that gross gaming revenues (GGR) are down 14 percent this week compared to the previous week, suggesting that The Parisian may have boosted “tourist volumes more so than spending on mass GGR.”
“Given the successful opening of The Parisian last week, the sequential decline suggests that GGR strength after Wynn Palace opened was primarily driven by VIP revenue,” wrote Curtis.
On the other hand, Morgan Stanley was more optimistic in its assessment of the gaming industry, concluding that there is the “potential for significant upside to MGM and Wynn” as the stock of both companies are now “under-owned relative to historical levels.”
The company’s analysts believe that “there is room for incremental buyers, especially as interest in Macau appears to be revitalized given the potential turn in market fundamentals (August GGR growth of 1.1 percent was the first positive monthly growth since May 2014).”
Morgan Stanley bases its analysis on a survey of the largest 100 asset managers’ portfolios, but excludes index fund holdings. DB