Steve Wynn About To Show His Pocketbook (WYNN)

Very shortly after today’s close we are going to get a good glimmer into the overall health of casino stocks as Wynn Resorts Ltd. (NASDAQ: WYNN) is going to be opening its back office doors for a day to show how much money the company is making.  Of the major casinos, this is the highest end of the spectrum as far as the income level of customers.

Estimates from First Call are $0.93 EPS on just over $828 million inrevenues.  If Steve Wynn dares to give earnings guidance for the comingquarter and year estimates are $0.68 EPS on $744.34 million revenues inQ3-2008 and $3.10 EPS on $3.13 Billion revenues for FiscalDecember-2008.

The company has already tempered some guidance expectations on itsearly July commentary on Las Vegas operating profits but noted how Macau was running strong.  Mr. Wynnalso noted that he’d open up the treasury vault to repurchase up to$500 million in common stock, almost 5% of today’s current market cap.  Even if you include today’s 7% drop,this stock is up over 33% since the July 10 and July 11 news flow dates.

Analysts on average have a price target north of $105.00 on last lookand we could argue today that options traders are braced for a move ofsomewhere around $8.00 in either direction based upon the news.  Shareshave also been nestled between key moving averages in the last few daysas the 50-day moving average is $91.46 and the 200-day moving averageis $109.58.

Do we dare call this company one that is becoming a duel between LasVegas and Macau?  Either way, Mr. Wynn is going to have to more thanimpress everyone to keep this much of a gain up.

Jon C. Ogg
July 24, 2008