Deutsche Bank analysts remain confident that Wynn will successfully cannibalize Cotai enough to generate a return that implies upside in shares.
“While we expect little in the way of incremental supply stimulating demand, we remain confident that WYNN, a historical EBITDA fair share premium generator,” will cannibalize Cotai.
“Furthermore, we think far too much has been made of WYNN potentially having balance sheet issues.”
“We don’t believe we have been shy when it comes to our outlook for Macau and the challenges we believe remain with respect to the Cotai pipeline. That being said, we believe WYNN shares have been punished enough, largely due to the estimate revisions, but more specifically, on a relative basis, because of the perceived risk that WYNN has a balance sheet issue on the horizon.”