Shares of casino companies with operations in Macau, such as Wynn Resorts (WYNN) - Get Wynn Resorts, Limited (WYNN) Report and MGM Resorts (MGM) - Get MGM Resorts International (MGM) Report, rose on Tuesday after Macau’s government unveiled looser COVID-testing rules.
Starting on Wednesday travelers from mainland China who haven’t been to a foreign country or Hong Kong must have a negative COVID test less than seven days before their arrival in Macau.
The prior regulation demanded that a test be conducted within the prior 48 hours, according to the Macau government’s website.
Morningstar analyst Dan Wasiolek is bullish on Wynn, putting fair value at $114.
Two weeks ago he wrote, “COVID-19 continues to materially impact Wynn's Macau operations (76% of pre-pandemic 2019 Ebitda), which we view as transitory.”
He views Wynn as “a high-end iconic brand that is well positioned to participate in the attractive long-term growth opportunity of Macau, as it expanded its room share in the region through the August 2016 opening of the Palace. “
To be sure “This is offset by the expected long-term shift away from VIP and gaming revenue (where Wynn has outsize exposure) toward non-gaming and mass play, as well as its existing Macau property on the peninsula, where traffic has lagged Cotai,” Wasiolek said.
Still, “[long term], we see solid visitation and gaming growth for Macao.”