Wynn Resorts price target cut

Jan 16, 2009 9:15 PM
Staff & Wire Reports |

The softening Las Vegas market led an analyst to reduce his price target and trim some estimates for casino operator Wynn Resorts Ltd. Friday.

The casino sector has been squeezed as consumers tighten discretionary spending due to economic concerns and job worries.

Lawrence Klatzkin of Jefferies & Co. said he lowered some of his market and property level forecasts since Las Vegas casino operators have been hindered by declining room rates and added expenses as they try to draw in customers.

The analyst cut Wynn's fourth-quarter earnings estimate to 43 cents per share from 66 cents per share and reduced his 2009 forecast to $1.03 per share from $1.58 per share.

While Las Vegas is a drag on results, Klatzkin said he still considers Las Vegas-based Wynn a safe investment option partly on its approximately $1 billion in available cash.

"This gives the company more flexibility than others in order to stay protected on the downside, and the potential to fund future projects or make strategic investments on the upside," he wrote in a client note.

Klatzkin cut Wynn's price target to $71 from $77 and reaffirmed a "Buy" rating.

Related Articles:
Gaming stocks now on the rebound?
Las Vegas billionaires: riches to rags?
Wynn christens Encore resort with optimism