Momentum for any additional casino and integrated resort licenses to be issued in the United Arab Emirates appears to be slowing, providing Wynn Resorts with an even more valuable head start in the region, according to CBRE.
Publishing overnight a detailed summary of its Las Vegas Executive series, which saw CBRE analysts sit down for a series of Las Vegas C-Suite meetings with leading Vegas-based gaming operators, the investment bank noted that construction of Wynn Al Marjan Island was powering towards its scheduled 2027 launch and has now become “all but a sure thing”.
While valuation of Wynn stock has not yet priced in the opening of the company’s UAE project, the analyst said, “It appears momentum for any additional integrated resort licenses in the UAE has slowed, which in turn improves Wynn’s head start in the region to at least a couple of years, if not longer.
“Although we still think the awarding of a second license will happen eventually and would likely help investors gain confidence in the market (and thus, valuation credit), the benefit of a longer head start in the region is probably more valuable longer-term.”
Wynn management, the analysts added, remains “laser focused” on the Wynn Al Marjan Island development, described as the single greatest growth opportunity for the company.
“Management is acting accordingly,” CBRE wrote.
“The company is rightly all-hands-on-deck for Wynn Al Marjan Island until its opening, between asset development, curating the right entertainment and non-gaming amenities, getting to know the local customers, and training the staff up to the Wynn standard.
“There is clear global demand for the Wynn brand, as the company noted in relation to its recent acquisition of Crown Aspinalls in London, and we expect a full global opportunity suite to be open to the company upon completion of its flagship in the UAE.”
CBRE also observed that Wynn was stepping up its buyback program, taking the opportunity to acquire shares before investors fully price the UAE development in.
“We expect repurchases to continue at an elevated pace (US$813 million left on its US$1 billion buyback authorization as 31 December) throughout its current authorization and potentially even further, until the company begins to get credit for its growth prospects in Wynn Al Marjan Island,” the analysts said.
