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Wynn Stock Slips; Jefferies Cuts Target Over Macau Policy

Jefferies cut its price target on Wynn Resorts to $83 a share after the Macau government signaled a policy shift to tighter control.

Wynn Resorts  (WYNN) - Get Wynn Resorts, Limited (WYNN) Report shares slipped Friday after Jefferies analysts cut their price target on the casino operator. 

The analysts said Wynn's primary earnings could be materially hurt if Macau's government tightens restrictions around gambling licenses. 

Jefferies lowered its price target on Wynn to $83 a share from $104. Analysts David Katz, Cassandra Lee and Farshid Javar maintained their hold rating on the stock.

For full year 2023 analysts at Jefferies estimate a 24% dip in revenue from Macau.

Shares of the Las Vegas company at last check dropped 0.4% to $84.

The public statement by Macau government officials released on Wednesday, indicated a policy shift that "is likely most negative for VIP revenues, which accounted for roughly half of WYNN's Macau gaming revenue prepandemic," the note said.

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On Wednesday, Macau government officials released a document outlining that regulators could revise rules for next year's auction of gambling licenses to possibly include government supervision of the companies' day-to-day operations.

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Jefferies further attributed the cut in price target to the ongoing Covid overhang and Macau's zero tolerance toward coronavirus, which could lead to a choppy economic recovery.

Jefferies expects Wynn Resorts to generate $3.86 billion in overall revenue and $732.8 million in adjusted Ebitda. 

The analysts also lowered their adjusted-Ebitda forecasts for fiscal 2022, to $1.44 billion, and fiscal 2023, to $1.55 billion.

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