Wynn Resorts seesaws on upgrade, price target cut

Shares of Wynn Resorts Ltd. fluctuated Thursday as an analyst upgraded the casino operator on its solid Las Vegas and Macau footholds, but another slashed its price target.

Jeffrey Logsdon of BMO Capital Markets said Wynn is fairing better than other competitors partly because it has less exposure to the low-end consumer. Its Wynn Las Vegas property appeals mostly to high-end consumers, while Wynn Macau draws in a good number of non-junket VIP gamblers, he explained.

The analyst boosted his rating to "Outperform" from "Market Perform."

But the investor reaction to the upgrade was somewhat muted by another analyst's price target cut.

Jake Fuller, an analyst with Thomas Weisel Partners LLC, said in a client note that he was dropping Las Vegas-based Wynn's price target to $95 from $104 due to declining third-quarter revenue, increased 2009 earnings before interest, taxes, depreciation and amortization and lower 2010 EBITDA.

"We are increasingly worried about new Macau supply in a weaker economic backdrop," Fuller wrote in a note.

Some of the upcoming openings in Macau next year include Melco Crown Entertainment Ltd.'s City of Dreams development in the first quarter and new resorts from Las Vegas Sands and Galaxy Entertainment Group, both in the third quarter next year.

The gaming sector has been pressured as consumers tighten spending due to the housing downturn, diminishing credit and rising food and fuel costs.

After starting in the red, Wynn's stock added $1.69, or 2.1 percent, to $83.85 in late morning trading. The shares have traded in a 52-week range of $69.27 to $176.14.