China said Macau will close all casino’s for 15 days as a result of the coronavirus. One of the most negatively impacted U.S. companies is Wynn Resorts and with the company’s earnings report coming up, investors will get a clearer picture than what they had Tuesday.
Wynn Resorts shares are up 2.39% to $131.66 a share Tuesday, as the broader U.S. market rose, as investors are looking past what they see as a temporary virus outbreak. The SP 500 rose as much as 1.2%.
Wynn Resorts shares would be a prime beneficiary of coronavirus optimism, as the stock is down 16% since January 17, when global markets began selling off on fears of the economic impact of the virus.
They key number for Wynn: the company sees 75% of its revenue stream from Macau, specifically.
Wynn operates hotels and casinos in Macau.
Fortunately for Wynn investors, fourth quarter 2019 earnings are on Thursday after the U.S. market closes. It’s unlikely there will be any revenue impact from casino closures on the reported quarter, as the closures are happening in February, while Q4 ended in December. There may be some impact from the coronavirus, although the virus didn’t fully break out until January.
Investors will likely listen to management’s comments on the situation, to hear if the team will speak or has spoken to the city of Macau. Current quarter and full year guidance could certainly be impacted by the 15 days of closures, but of course, management is hoping the closures stop at 15 days and don’t bleed further into March.