Palace EBITDA to hit $432 million in 2017: MS

Morgan Stanley has revised its 2017 EBITDA expectations for Wynn Palace to US$432 million following strong 16Q4 performance.

“We expect continued ramp-up of Palace through 2017, as mass table yield and margins are still at a discount to industry averages,” said the brokerage in a note on Monday.

Morgan Stanley says its EBITDA forecast for Wynn Palace has increased 2 percent, and price target by 3 percent “after strong 16Q4 beat.”

The brokerage also says that slot and non-gaming revenues should continue to grow, while operating expenses could fall in the year.

In January, Wynn Resorts reported a 30.5 percent year-on-year rise in net income in 16Q4 attributed to strong revenue from Wynn Palace.

Net revenues for the fourth quarter of 2016 was $1.3 billion, representing an increase of 37.3 percent year-on-year.

The operator, which opened its new Wynn Palace property in August 2016, posted Wynn Palace net revenue at $418.7 million, while adjusted property EBITDA was $77.5 million in 16Q4.

Analysts said the results were due to a faster than expected ramp up.