Image source: Wynn Resorts.
Continue Reading Below
What: Shares of gaming giant Wynn Resorts, Limited jumped 13.3% in March according to data provided by S&P Global Market Intelligenceas positive news from Macau boosted the stock.
So what: Early in March, investors thought Macau's gaming market was finally hitting a bottom after the government reported only a slight decline in February's gaming revenue to $2.4 billion. That got investors excited about a potential turnaround in Macau, helping Wynn Resorts, only to see March's revenue fall 16.3% from a year ago. We may be nearing a bottom in Macau, but there's no sign that an uptick in revenue is coming quickly, and that could temper expectations for Wynn going forward.
Now what: Wynn Resorts would like to see an increase in gaming revenue, in part because Wynn Palace is due to open sometime this summer. If gaming revenue is still low, it could cannibalize revenue from Wynn Macau, and new resorts coming in the next two years will do the same. So, an increase in gaming revenue would be welcome timing for investors.
I still think the impact of Wynn Palace will be so big that investors should remain bullish on Wynn Resorts, but lowering expectations might be a good idea because Macau isn't going to return to the glory days of two years ago anytime soon.
The article Why Shares of Wynn Resorts, Limited Jumped 13% in March originally appeared on Fool.com.
Travis Hoium owns shares of Wynn Resorts, Limited. The Motley Fool recommends Wynn Resorts, Limited. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright 1995 - 2016 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.