MGM Upgraded, Penn Downgraded, Wynn Top Idea in Stifel 2023 Gaming Coverage
The too soon innings of 2023 are bringing most a unfermented daily round of commentary from sell-side analysts with Stifel’s Steven Wieczynski chiming inwards on a change of intimate names.
In a young mention to clients, he unveils constructive comments on Las Vegas Strip and Macau operators while expressing reservations well-nigh regional gambling casino companies. As such, he upgraded MGM Resorts International (NYSE:MGM) to “buy” from “hold” while defend a “buy” rating on Wynn Resorts (NASDAQ:WYNN) and boosting his damage point on that name. At least three analysts just now this week lifted toll objectives on the Encore operator.
We are magnanimous believers in the Macau/China reopening swop continuing on as Macau tardily returns to normal,” wrote Wieczynski. “We trust the LV Strip testament keep to brandish aided past a warm event calendar and the payoff of group/convention traffic.”
Macau is Wynn’s biggest market patch MGM is the largest manipulator on the Strip and also controls well-nigh 56% of MGM China.
Enthusiasm for MGM, Wynn
With the help of People's Republic of China dropping its zero-COVID insurance policy and relaxing Macau move around protocols, Wynn started 2023 with a bang, surging 14.05% o'er the past tense week.
The aforementioned cost target area hikes are also serving the shares. Wieczynski boosted his 12-month forecast on Wynn to $115 from $109. He also upped his toll estimates on Las Vegas Sands (NYSE:LVS), which is the largest Macau operator, and Monarch Casino & Resort (NASDAQ:MCRI).
“As we make a motion into 2023, we believe Macau-centric stocks could represent investors with an interesting right smart to run the Communist China reopening story,” added the analyst. “While we feature had several head up fakes over the last twelvemonth inwards which it seemed People's Republic of China was sledding to wantonness their zero-COVID policies, from each one head word fake turned out to be a off-key alarm. Now even so on that point seems to live crystalize signs coming come out of Peking that COVID limitations/restrictions are so sledding to follow eliminated for good.”
Regarding MGM, the Bellagio operator’s shares disappointed cobbler's last twelvemonth when considering the telling monthly revenue gaming revenue (GGR) information delivered by Battle Born State casino companies, but the gillyflower is higher by 8.39% over the past tense week. Wieczynski’s young terms place on that epithet is $46, implying substantial upside from the Thursday closemouthed at $35.15.
“Our upgrade is pretty simple. At this gunpoint we believe the LV Strip impulse should easily proceed through 2023 and into 2024 and we insure more value with Macau/LV Strip operators versus vestal spiel regional gaming operators,” according to the analyst. “LV Strip leisure exact remains whole and we hold seen no more grounds that customer disbursal is softening. The LV Strip event calendar is warm inwards 2023 with multiple marquee events. In addition, we expect the midweek group and rule business organization should takings to pre-pandemic (run rate) levels before the end of the year.”
Tepid on William Penn Entertainment
Citing potentiality weakness for regional gambling casino operators, Wieczynski is less constructive on Penn Entertainment (NASDAQ:PENN) — the largest troupe in that space.
“Our fear is that consensus estimates are too fast-growing(a) at this point, and we would wait there mightiness demand to follow some downward revisions moving forward. Looking at 2023 for PENN, you hold to call up that they are sledding to ascertain a material amount of new supply,” concluded the Stifel analyst.
He cut his price point on William Penn to $35 from $45.