Zacks Investment Research upgraded shares of Wynn Resorts Limited (WYNN) from UNDERPERFORM to NEUTRAL on September 18, 2012, with a target price of $118.00.
Owing to the weak performances in its Las Vegas and Macau business, Wynn Resorts' reported dismal second quarter 2012 earnings. A weak Chinese economy led to the slowdown in the Macau market. Moreover, business at Las Vegas might also get impacted due to the excess capacity in the market. Additionally, we remain cautious on the stock because of limited diversity and stiff competition. However, we expect the company to gain from the recent rebound in Macau's gaming revenue. Moreover, long-term growth potential of the Macau market remains solid. We also remain encouraged by the company's strong brand name, healthy balance sheet, strong cash flow position, relatively low capital requirements and its ability to perform in a difficult operating environment. Hence, we upgrade our rating on the stock from Underperform to Neutral.
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