Wynn Resorts (WYNN) soared nearly to the top of the S&P 500 today after Morgan Stanley argued that the casino stock had the potential to double.
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Wynn Resortsgained 4.8% to $104.30 today, while the S&P 500 finished little changed at2,373.47. At 2:45, Wynn was easily the top performing stock in the S&P 500, only to be surpassed by Citrix’s (CTXS) late day surge.
Morgan Stanley’s Thomas Allen and team explain how Wynn could double:
Our AlphaWise work on Google search data and separate analyses of market trends suggest the Street is too low on WYNN’s Macau market share gains. Our base case implies 20% upside; bull case, the stock could double.
Consensus forecasts WYNN to essentially not grow Macau market share over 4Q16, despite the Aug ’16 opening of Wynn Palace (which increased WYNN’s room capacity by 170%) and the general view that the benefit from the property has been disappointing so far. We see upside to WYNN’s market share supported by (1) analysis of Google search trends, (2) current market dynamics and WYNN actions, and (3) the performance of WYNNs first Macau property
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