Gambling Stock Roundup: WYNN Q4 Beats But Steve Wynn In Trouble; LVS Impresses
Zacks Investment Research | Jan 29, 2018 12:16AM ET
Last week saw Wynn Resorts (NASDAQ:WYNN) and Las Vegas Sands (NYSE:LVS) post robust quarterly results. However, Wynn chairman and CEO Steve Wynn stepped down as finance chairman of the Republican National Committee (RNC) amid accusations of sexual harassment.
Here are the developments in detail-
A Mixed Week for Wynn
Earnings Beat
Wynn Resorts posted strong fourth-quarter 2017 results, beating the Zacks Consensus Estimate on both counts.
Earnings of $1.40 per share surpassed the consensus mark by 2.9% and increased more than 100% from the year-ago figure of 50 cents, given a substantial increase in operating income from Macau operations (Wynn Palace and Wynn Macau) and income tax benefit from U.S. tax reform, partially offset by a decrease in Redemption Note fair value.
Revenues exceeded the consensus mark by 9.7% and increased 29.9% year over year, again driven by significant contribution from Wynn Palace and Wynn Macau.
CEO Accused of Harassment
The Wall Street Journal reported Friday that several women said they were harassed or assailed by Wynn chairman and CEO, Steve Wynn. Wynn denied all allegations the same day, stating, "The idea that I ever assaulted any woman is preposterous."
The casino tycoon resigned from his RNC finance chair role the next day. He has been a high-volume Republican donor, and led fundraising activities of the RNC during President Donald Trump's first year, helping the committee earn more than $130 million.
Commitment to Renewable Energy
A day before the CEO disaster, Wynn announced that it will power its multi-use development, Paradise Park, entirely with renewable energy from the Enel (MI:ENEI) Green Power North America (EGPNA) owned and operated 27 MW Wynn Solar Facility. The facility is currently under construction in Stillwater, NV and is expected to start operating by the first half of 2018.
The move will help meet 75% of Wynn Las Vegas’ current peak power requirements. Wynn claims that no other resort in Las Vegas and gaming operator in Nevada has ever used such high percentage of renewable energy.
Wynn Resorts carries a Zacks Rank #2 (Buy). You can see .
Las Vegas Sands Q4 Earnings Beat on Solid Top Line
The company’s fourth-quarter 2017 adjusted earnings per share of 88 cents surpassed the Zacks Consensus Estimate by 14.3% and increased 41.9% year over year on higher revenues. Net revenues of $3.4 billion beat the consensus mark by 6.3% and increased 11.7% year over year.
The solid performance can be attributed to the scale and diversity of gaming and non-gaming services across Macao and Singapore operations.
Las Vegas Sands carries a Zacks Rank #2.
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Price Performance
The following table shows the price movement of the major gambling stocks in the past week and the last six months:
Company | Last Week | Last 6 Months |
WYNN | -7.7% | 39.4% |
CNTY | -2.5% | 31.1% |
MLCO | -3.6% | 41.0% |
MCRI | -0.6% | 36.1% |
PENN | -1.2% | 61.9% |
BYD | 4.8% | 56.9% |
LVS | -2.1% | 22.5% |
In the last five trading sessions, share price movement of the major gambling stocks displayed a more or less dismal trend. Notable movements include that of Wynn Resorts, Melco Resorts (NASDAQ:MLCO) and Century Casinos (NASDAQ:CNTY) , which lost 7.7%, 3.6% and 2.5%, respectively.
In the last six months, the price performance of gambling stocks has been impressive. Among the stocks that appreciated the most were Penn National Gaming (NASDAQ:PENN) , Boyd Gaming (NYSE:BYD) and Melco Resorts, appreciating 61.9%, 56.9% and 41%, respectively.
What’s Next in the Gambling Space?
We note that gambling stocks have oscillated between gains and losses in recent sessions and investors can expect this volatility to continue in the coming days.
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