While sentiments over China’s economic slowdown and decelerating GGR growth has led to a sector-wide sell-off, Bernstein analysts believe the correction to Wynn Macau stocks was overdone, and that there is opportunity for the stock to outperform.
“...the correction we have seen in Wynn Macau stock has been much too severe, in our view,” said Bernstein in a note on Wednesday.
“For Wynn Macau, we believe the market had overreacted to the China Macro slowdown risks and the decelerating GGR environment.”
Bernstein said that while Wynn does have higher exposure to VIP, a segment which has been slowing, investors have also minimized Wynn’s strong position in the growing Premium Mass segment, its superior operational and marketing capability, and strong brand.
“After the recent sell-off, we believe Wynn's current valuation has become attractive, especially for longer-term focused investors that can bear near-term volatility,” said the brokerage.
Bernstein has revised its rating for Wynn Macau from Market-Perform to Outperform.
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