Monday, Nov. 28, 2011 | 10:17 a.m.
NEW YORK — Wynn Resorts Ltd.'s stock gained nearly 8 percent on Monday as an analyst upgraded the casino operator, saying it stands to benefit from continued strength in Macau and the ongoing recovery of the Las Vegas gambling market.
THE BIG PICTURE: Macau, the only place in China where gambling is legal and the world's biggest casino market, has continued to report solid gambling revenue gains throughout the year. Casino operators such as Wynn Resorts and Las Vegas Sands Corp. have looked to Macau to help bolster their businesses during the economic downturn as U.S. gamblers have continued to pull back on their spending. Las Vegas has started to see a gradual uptick in its business, which is encouraging because it is the second-largest casino market in the world and the biggest in the U.S.
THE ANALYSIS: Dennis Forst of KeyBanc Capital Markets boosted Wynn Resorts' rating to "Buy" from "Hold," saying in a client note that Macau will likely be a bright spot for the company next year, "as it remains the most vibrant gaming locale in the world with both visitation and spend per visit continuing to improve."
Forst said Wynn Resorts has an advantage in Las Vegas, which is where the company is based, because it caters to high-end customers. "Wynn Resorts' focus on the VIP segment of the Macau market and its high-end dominance should give investors solace, as we expect affluent Chinese and American clientele to hold up better than the mass market in any economic shock scenario," he wrote.
A representative for Wynn Resorts could not be immediately reached for comment.
STOCK MOVEMENT: Shares of Wynn Resorts added $8.35, or 7.8 percent, to $115.37 in morning trading. The stock has traded in a range of $99.21 to $172.58 over the past year.