What Happened?

Shares of luxury hotels and casino operator Wynn Resorts (NASDAQ: WYNN) jumped 3.7% in the afternoon session after its Wynn Macau subsidiary was upgraded by analysts at UBS, citing an improved outlook for Macau's gaming revenue. 

UBS raised its rating on Wynn Macau from Neutral to Buy and significantly lifted its price target. The bank's optimism is fueled by an increased forecast for Macau's Gross Gaming Revenue (GGR), now expecting 12% year-over-year growth in the second half of 2025, up from a previous estimate of 7%. The report noted that high-end gaming companies like Wynn are expected to maintain or grow their market share. This positive sentiment for the region was echoed by Morgan Stanley, which also projected that Macau's GGR is likely to see strong growth in the latter half of the year.

After the initial pop the shares cooled down to $124.37, up 4.4% from previous close.

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What Is The Market Telling Us

Wynn Resorts’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 5 days ago when the stock gained 3.1% on the news that the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.

Wynn Resorts is up 48.4% since the beginning of the year, and at $124.37 per share, has set a new 52-week high. Investors who bought $1,000 worth of Wynn Resorts’s shares 5 years ago would now be looking at an investment worth $1,437.

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