Wynn outlook clouded by Macau softness, Middle East tensions: JP Morgan

Wynn Resorts Ltd’s share price has fallen to a 52-week low amid investor concerns about softer-than-expected gaming trends in Macau and escalating tensions in the Middle East, says JP Morgan Securities LLC. The institution said Wynn Resorts’ stock had declined 14 percent over the preceding month, compared with a 2-percent fall in the S&P 500 index. The brokerage attributed the underperformance to concerns regarding the group’s exposure to Macau and the United Arab Emirates (UAE). “Macau industry GGR [gross gaming revenue] has been softer than expected post World Cup,” wrote analysts Daniel Politzer, Samuel Nielsen and Michael Hirsh in a Monday report. The FIFA World Cup 2026 football tournament ran from June 11 to July 19. Investment analysts had identified the event as a factor diverting some high-value customers from Macau gaming during June and July, particularly in the premium-mass and VIP segments. The brokerage said more broadly that Macau’s “post World Cup demand rebound appears short-lived”. There had initially been signs of a rebound following the tournament. Citi group estimated Macau’s average daily GGR for the first nine days of August at MOP733 million (US$90.7 million), about 12 percent higher than July’s daily rate. Seaport Research Partners had also said in August, following meetings with management at Wynn Resorts and MGM Resorts International, that revenue recovery was “evident” in Macau following the World Cup-related slowdown. The improvement, however, proved weaker than initially anticipated. Macau’s August GGR rose 8.1 percent sequentially to MOP21.89 billion, but was still down 1.2 percent from a year earlier. JP Morgan said at the time that the sequential improvement reflected a particularly weak July rather than a strong August. The softness has seemingly continued into September. UBS estimated average daily GGR of MOP633 million for the first six days of the month, down about 11.5 percent from August’s daily average, although up circa 4 percent year-on-year. Wynn Resorts controls Macau casino operator Wynn Macau Ltd, which runs Wynn Macau on the city’s peninsula, and Wynn Palace in Cotai. Management at the Wynn group said last month that construction of a previously-announced event centre and theatre at Wynn Palace would begin “in the coming weeks”, following approval in July by the Macau government of revised land-use terms. The group also expects to start construction of the US$950-million, 432-suite Enclave at Wynn Palace hotel tower before the end of this year. JP Morgan said Wynn Resorts was currently trading at 9.7 times estimated 2027 enterprise value to earnings before interest, taxation, depreciation and amortisation (EBITDA), broadly in line with its three-year average of 9.8 times. The brokerage said the valuation appeared to assign “little/no equity value” to the group’s under-construction UAE project, Wynn Al Marjan Island. The US$5.7-billion Wynn Al Marjan casino resort is being developed in Ras Al Khaimah – one of seven emirates of the UAE – and is scheduled to open in September 2027. Wynn Al Marjan is being developed by Wynn Resorts alongside local partners Marjan LLC and RAK Hospitality Holding LLC. Wynn Resorts holds a 40-percent equity interest in the UAE scheme. JP Morgan said escalating tensions in the Middle East were adding to investor concerns about Wynn Resorts, despite signs that day-to-day conditions in Dubai, another member of the UAE federation, had “largely returned to normal”. Nonetheless, the analysts said investors continued to perceive “significant risk” regarding whether Wynn Al Marjan would open on schedule, how it would perform upon opening, and the trajectory of its subsequent ramp-up. JP Morgan noted that perceptions regarding the level of stability in the Middle East had deteriorated amid the renewed tensions, and pointed to a rise in crude oil prices.