Wynn Drops After BofA Downgrades on Virus Impact in Macau

(Bloomberg) -- Wynn Resorts Ltd. declined in pre-market trading after BofA stepped away from its buy rating because of growing concerns about the impact of the deadly coronavirus on the company’s Macau operations.

“Comparisons to the SARS epidemic are imperfect but the scope is increasingly similar,” analyst Shaun Kelley wrote. “Cases are now more than 2,500 (vs. a SARS total ~8,100) with significantly increasing quarantines and travel restrictions.”

Wynn’s luxury casino resorts include the Wynn Macau and the Wynn Palace in Macau. Operations there contributed to about 75% of 2018 revenue, according to Bloomberg data. The company’s shares are down about 11% since mid-January and are tumbling 6% in trading before the opening bell.

Kelley now rates Wynn at neutral with a price target of $150, down from his previous $160. Analysts on average have a $152 target on the stock.

Meanwhile, Bernstein analyst Vitaly Umansky wrote that coronavirus impact on Macau is worse than expected.

“We now have data and anecdotal evidence and the Chinese New Year holiday period is shaking up to be the weakest Macau has seen in years,” Umansky said.

From Friday through Monday -- the day before the official start of the Chinese New Year and the first two days of the holiday period -- visitation into Macau is down 60% compared to the the similar holiday period last year, he said. Umansky added that visitation from Mainland China is down 66%.

Rival Las Vegas Sands Corp. fell more than 5% pre-market.

--With assistance from Janet Freund and Cristin Flanagan.

To contact the reporter on this story: Gregory Calderone in New York at gcalderone7@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Will Daley

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