What's The ‘Key Catalyst’ That Got BofA To Upgrade Wynn Resorts To 'Buy'?

Bank of America on Wednesday upgraded its rating on Wynn Resorts (WYNN) to 'Buy', saying that the hospitality firm's upcoming property in the Middle East will be a "key catalyst" for the stock.

The investment firm upgraded its rating from 'Neutral', and also bumped the price target to $100 from $90, according to The Fly.

Wynn's property in Al Marjan Island, set to open in early 2027, will be the first major integrated casino resort in the Middle East. 

The development will "increasingly factor into investor expectations and underwriting over the next 12-18 months," BofA said in a note.

BofA added that while investors will need to be patient, Wynn's recent pullback of 20% since October, 10% free cash flow yield, and core asset valuation increasingly de-risk exposure to China and Macau, the analyst said in a note.

Wynn stock gained 0.7% on Wednesday, its fourth straight session of gains.

The shares are still down 2.4% year to date.

Barclays also raised its price target on Wynn stock to $101 from $99 and kept its 'Overweight' rating.

The analysts’ actions come after the casino and hotel operator's quarterly report, which showed softness in the business.

Wynn posted lower revenue and profit for the first quarter.

On Stocktwits, the retail sentiment, however, dropped to 'Bearish' from 'Bullish' the previous day.

Some users expressed confusion over the rise in stock after what they saw as weak earnings. One questioned whether some institutional investors were "propping this up?"

The U.S. hospitality sector has shown a robust post-pandemic recovery, driven by high leisure and business travel demand, though rising operational costs and economic uncertainty pose challenges.

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