{"id":249983,"date":"2022-12-27T18:15:33","date_gmt":"2022-12-28T00:15:33","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=249983"},"modified":"2022-12-27T18:43:54","modified_gmt":"2022-12-28T00:43:54","slug":"wynn-resorts-likely-to-carry-high-leverage-throughout-2023","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/wynn-resorts-likely-to-carry-high-leverage-throughout-2023\/","title":{"rendered":"Wynn Resorts Leverage Tipped to Remain Elevated, Says Moody\u2019s"},"content":{"rendered":"

Leverage at Wynn Resorts\u2019 (NASDAQ: WYNN) financing unit is poised to remain elevated over the next 12 to 18 months, as the casino operator looks to get back on track in Macau.<\/p>\n

\"Wynn
Wynn Palace in Macau. Leverage for operator Wynn Resorts is expected to stay high in 2023. (Image: CNBC<\/em>)<\/figcaption><\/figure>\n

In a recent report, Moody\u2019s Investors Service forecasts leverage of 7.3x to 9.5x earnings before interest, taxes, depreciation and amortization (EBITDA) up to the next 18 months for Wynn Resorts Finance, LLC. That\u2019s the gaming company\u2019s financing business, which also encompasses capital needs for Wynn Macau. While those ratios are high, they\u2019re far better than 23.2x reported for the 12 months ending September 2022. Much of the gaming company\u2019s ability to pare leverage in 2023 could boil down to the strength of Macau\u2019s rebound.<\/p>\n

For Macau\u2019s VIP segment, we expect\u2026 GGR to remain substantially below the 2019 level even in 2023-2024 because of the increasing regulatory scrutiny over the segment and the weakened junket sector,\u201d<\/strong> noted Moody\u2019s.<\/p><\/blockquote>\n

The research firm has a junk rating of \u201cB1,\u201d with a negative outlook on Wynn Resorts Finance. That credit grade has been in effect since December 2021, and is considered speculative.<\/a> Bonds with that ratings are \u201csubject to substantial credit risk.\u201d<\/p>\n

Wynn Resorts Finding Momentum<\/h2>\n

Over the past month, shares of Wynn Resorts are higher by 12.55%, trimming the stock\u2019s year-to-date decline to just 0.83%. That\u2019s noticeably better than the broader market and the gaming complex.<\/p>\n

\n

The previously scuffling casino stock is picking up the pace to close 2022 amid a spate of encouraging headlines — namely Macau\u2019s decision to renew the licenses<\/a> of the six established concessionaires, including Wynn Macau — and China\u2019s recent call to scrap its zero-COVID policy.<\/p>\n<\/div>\n

Both issues were significant overhangs on Wynn shares. But with both out the window for now, analysts are optimistic that Wynn can generate more upside for investors in 2023. That’s while potentially making inroads when it comes to debt reduction. However, the stock isn\u2019t a risk-free bet.<\/p>\n

Wynn Finance\u2019s junk credit rating is indicative of \u201clingering earnings weakness from efforts to contain the coronavirus and the slow recovery in Macau visitation and revenue,\u201d <\/strong>according to Moody\u2019s.<\/p>\n

Macau is Wynn\u2019s largest market, and a resurgence there is essential to longer-running upside for the shares and a possible credit upgrade. But Moody\u2019s also highlighted strength in the operator\u2019s other markets of Boston and the Las Vegas Strip. The Las Vegas-based company is also eyeing possible entry into New York City<\/a>.<\/p>\n

Speaking of Credit Upgrade\u2026<\/h2>\n

While there\u2019s obvious optimism pertaining to Macau heading into 2023, it could be some time before gross gaming revenue (GGR) there returns to pre-pandemic levels. As such, it\u2019s also likely to take a while before concessionaires, including Wynn, are positioned for credit upgrades.<\/p>\n

Moody\u2019s says Wynn would need to drive its debt\/EBITDA<\/a> ratio to 6x before a credit rating upgrade would be feasible.<\/p>\n

Such action requires Macau \u201ccasinos to remain open and ramp up closer to normal utilization\u201d and a \u201crestoration of sufficient earnings to generate meaningful positive free cash flow before discretionary development spending,\u201d <\/strong>concluded Moody\u2019s.<\/p>\n","protected":false},"excerpt":{"rendered":"

Leverage at Wynn Resorts\u2019 (NASDAQ: WYNN) financing unit is poised to remain elevated over the next 12 to 18 months, as the casino operator looks to get back on track in Macau. In a recent report, Moody\u2019s Investors Service forecasts leverage of 7.3x to 9.5x earnings before interest, taxes, depreciation and amortization (EBITDA) up to […]<\/p>\n","protected":false},"author":46,"featured_media":249984,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[69069,10],"tags":[81913,81903],"acf":[],"yoast_head":"\nWynn Resorts Likely To Carry High Leverage Throughout 2023<\/title>\n<meta name=\"description\" content=\"Wynn Resorts will likely sport high leverage for awhile, possibly into 2024.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/wynn-resorts-likely-to-carry-high-leverage-throughout-2023\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Wynn Resorts Likely To Carry High Leverage Throughout 2023\" \/>\n<meta property=\"og:description\" content=\"Wynn Resorts will likely sport high leverage for awhile, possibly into 2024.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/wynn-resorts-likely-to-carry-high-leverage-throughout-2023\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2022-12-28T00:15:33+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-28T00:43:54+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/12\/WP-1-scaled.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2560\" \/>\n\t<meta property=\"og:image:height\" content=\"1706\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/wynn-resorts-likely-to-carry-high-leverage-throughout-2023\/\",\"url\":\"https:\/\/www.casino.org\/news\/wynn-resorts-likely-to-carry-high-leverage-throughout-2023\/\",\"name\":\"Wynn Resorts Likely To Carry High Leverage Throughout 2023\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/wynn-resorts-likely-to-carry-high-leverage-throughout-2023\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/wynn-resorts-likely-to-carry-high-leverage-throughout-2023\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/12\/WP-1-scaled.jpg\",\"datePublished\":\"2022-12-28T00:15:33+00:00\",\"dateModified\":\"2022-12-28T00:43:54+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Wynn Resorts will likely sport high leverage for awhile, possibly into 2024.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/wynn-resorts-likely-to-carry-high-leverage-throughout-2023\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/wynn-resorts-likely-to-carry-high-leverage-throughout-2023\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/wynn-resorts-likely-to-carry-high-leverage-throughout-2023\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/12\/WP-1-scaled.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/12\/WP-1-scaled.jpg\",\"width\":2560,\"height\":1706,\"caption\":\"Wynn Palace in Macau. 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