Private Market Value Deep Dive: Wynn Resorts (WYNN) (2-7-2018)

Private Market Value Deep Dive: Wynn Resorts (WYNN) (2-7-2018) Gabelli Research Analyst Adam Trivison

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Transcript:
We believe that the likelihood of M&A involving some or all of Wynn Resort’s assets has increased following the departure of Steve Wynn as Chairman and CEO.

Potential outcomes could include the sale of the entire company or individual assets and financial engineering involving the company’s 72 percent stake in Wynn Macau Limited, which is traded on the Hong Kong exchange.

In light of this, I will do a deep dive into our Wynn Resorts Private Market Value or PMV analysis.

Currently, Wynn is trading at 177 dollars per share.

Marked to market, the Wynn Macau stake is worth 117 dollars, implying 60 dollars per share of value for the company’s US assets.

This compares to our 2020 PMV of 220 dollars per share, which is comprised of:

70 dollars per share for Wynn’s Las Vegas assets, this includes the existing casino-resort and the Paradise Park lagoon and convention facility, which are currently under construction.

30 dollars per share for Wynn Boston Harbor, which is expected to open in June 2019 and could generate more than 350 million dollars of annual EBITDA at maturity.

27 dollars per share for the holding company’s royalty payments from Wynn Macau

Less 65 dollars per share related to corporate expense, and the US and holdco net debt


Our 2020 Wynn Macau Limited PMV is 34.50 Hong Kong dollars per share, this implies 159 US dollars per share of value for Wynn Resorts 72% equity stake.

Our Wynn Macau stake valuation is comprised of:

87 dollars per Wynn Resort share for Wynn Palace, which we expect to continue to ramp and gain share as the Macau market grows.

78 dollars per Wynn Resort share for the Wynn Peninsula property

Less 3 dollars per Wynn Resort share of Macau net debt

We encourage you to read our full research report.



Source: Gabelli TV (via YouTube)
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