By Dhirendra Tripathi
Investing.com – Wynn Resorts (NASDAQ:WYNN) stock traded 4% higher Friday after Citi analyst George Choi upgraded it to ‘buy’ with a target of $96.50, citing multiple reasons for his optimism.
The new target, $1.50 less than Choi’s previous one, is around 16% higher than the stock’s current level of $83.
According to StreetInsider, the analyst likes Wynn “for its 'increasing dedication to Premium Mass in Macau'." Choi called the valuations “undemanding” at around 8.6 times EV/EBITDA multiple as per estimates for financial year 2023.
The brokerage also pointed to increasing clarity over regulations and licenses in Macau as reasons behind the bullish outlook, according to CNBC.
Earlier this month, authorities on the island decided to extend the licenses by six months, giving more time to a highly anticipated rebidding process in the world's biggest casino hub.
Authorities will start the rebidding process once the city's legislature has passed a revised law, Reuters quoted Hong Kong’s Economy and Finance Secretary Lei Wai Nong as saying.
Macau’s six operators including Wynn have to reapply to maintain operations in the former Portuguese colony.
Macau lies off Hong Kong and is part of China. Local authorities have earlier called for tighter supervision of casino operators and higher local ownership in gaming companies operating in the region.
China has been clamping down on high-stakes betting in Macau which takes place in convertible Hong Kong dollars. It is alleged the gambling trades enable illicit outflow of currency and money-laundering efforts.