Wynn Resorts Misses Q3 Forecasts But Stock Gains on UAE Optimism

Wynn Resorts reported third-quarter earnings below Wall Street forecasts on Thursday evening, with weakness persisting across its two largest markets, Macau and Las Vegas, according to Casino.org News.

For the quarter ended September 30, the Nasdaq-listed operator earned 33 cents a share on revenue of $1.69 billion. Analysts had expected 59 cents a share on sales exceeding $1.7 billion.

Adjusted property earnings before interest, taxes, depreciation, amortisation and restructuring or rent costs fell by nearly $106 million to $464.2 million, Casino.org News reported.

Despite the shortfall, Wynn shares traded higher during the midday session as several analysts argued the stock remains undervalued relative to its underlying assets.

Stifel analyst Steven Wieczynski told clients the market continues to overlook Wynn's premium positioning in Las Vegas, writing that the company's United Arab Emirates project "remains on track for a September 2027 opening."

Wieczynski added that either the UAE development or Wynn's Macau operations "remain grossly undervalued/underappreciated (or not even a value ascribed)," describing Wynn as the most misunderstood name in his gaming coverage.

Wynn's Macau business continues to lag, mirroring the broader difficulties facing operators there, while its Las Vegas properties are outperforming rivals on the back of the company's focus on high-spending customers.

On the earnings call, chief executive Craig Billings said Wynn has "started to doodle and think about" development options for unused Las Vegas real estate that some estimates value at $1 billion or more.

Billings said the company was weighing how such a project might connect to its existing Wynn and Encore properties, potentially allowing construction at a lower overall cost than a standalone integrated resort.

Asked about expansion opportunities in the US regional casino market, Billings pointed to Texas, calling it "kind of a stealth market that is giant" and noting Wynn's brand recognition and existing customer database there.

His comments followed Tuesday's midterm elections, in which Democrats won all major statewide offices in Texas, fuelling speculation that gaming expansion legislation could gain traction in the state.

On the UAE project, Wynn Al Marjan Island remains targeted for a September 2027 opening. Jefferies analyst David Katz said management commentary suggests there are multiple paths to success at the property depending on the customer base it attracts.

Wynn disclosed remaining equity requirements for the UAE project of between $465 million and $590 million, a reduction from the figure given in the second quarter.

Wieczynski estimated the UAE development alone could be worth $19 to $25 per share in today's dollars, a figure he said has been largely excluded from Wynn's current trading levels.