Today's Research on Wynn Resorts and Melco Crown: Industry Leaders Focus on Asia Gambling Scene

Jan 25, 2013, 08:00 ET from

LONDON, January 25, 2013 /PRNewswire/ --

Casino companies are feeling the heat of the tough economic scenario. Most of the gambling companies have expanded their operations to Asian hotspots like Macau and Singapore. However, since the current economic scenario is gloomy across the globe, it is difficult for the gambling companies to come up with ambitious plans for the near future. While luxury segment operator Wynn Resorts Ltd. (NYSE: WYNN) offered muted returns, Melco Crown Entertainment Ltd. (NYSE: MPEL) is currently creating new 52-week highs. StockCall has posted its latest technical analysis on Wynn Resorts and Melco Crown, and these reports can be accessed at

Wynn Waits for High Rollers to Return

Wynn Resorts is going through some tough times as it is experiencing a decline in its high roller revenues. The stock started performing towards the end of 2012, but its outlook for 2013 is still cautious. Since the gambling company is more reliant on its high margin top player segment, it is likely to report only modest growth this year. Due to tough economic times in the U.S. as well as in China, the luxury gambling segment will remain in the doldrums for the foreseeable future, putting extra pressure on Wynn's bottom-line. Register now to have free access to our reports which include Wynn Resorts at

At its current market price, Wynn offers slightly above 1.5% dividend yield and it is expected that the casino company would be raising its dividend payment this year. However, it derives more than two thirds of its revenue from Macau and the decrease in luxury gambling revenue in Asia is expecting to put a dampener on the company's fortunes. Another indicator that the company is going to take conservative approach this year comes from the expected delay in the commissioning of its new resort in Macau. Wynn was expected to open its Cotai resort in 2016. However, now the expected date has been pushed up to 2017. While Wynn Resorts caters to the upper segment of gamblers and has maintained distance from mass gambling, it is still likely to feel intense pressure from the growing presence of discount casino runners like Las Vegas Sands.

Melco Milks Macau Casino Growth

Melco Crown primarily operates in Macau and the gambling haven reported 13.5% revenue growth for 2012. However, a bigger chunk of this growth came from mass gambling segment and Melco Crown reaped the benefits. However, after the steep run up lately, the stock is now trading at high multiples and thus looks set to make a pullback. The company is also set to face tougher legal scene. Late last year, the stock took a beating when it came to light that the Chinese government may take harsh steps to contain money laundering incidences.

Melco, with its $11.20 billion worth of market capitalization, is one of the biggest players in the leisure industry. However, unlike Wynn and MGM, Melco is almost completely focused on the Asian gaming scene and thus is more open to macroeconomic factors in China and Asia. The gaming company is also planning to go ahead with its expansion plans as it inked a new $1.4 billion worth of financing deal to back its Macau Studio City venture. Melco is also well placed to grab a big slice of the pie as the economic situation in China eases up.


  1. Wynn Resorts Ltd. Technical Analysis [ ]

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