Wynn Resorts (WYNN, Financial) is making headlines after billionaire Tilman Fertitta disclosed a 9.9% stake in the company, sending shares soaring more than 10%. Fertitta, well-known for his savvy investments in hospitality and entertainment, now owns roughly 10.9 million shares of Wynn. While the stake is currently labeled as “passive,” industry insiders are buzzing that it might not stay that way for long. Analysts have noted that Wynn's recent underperformance in Macau and tempered Q4 projections didn't spook Fertitta, who seems to be eyeing the company's long-term recovery in key markets like Las Vegas and Macau.
Adding fuel to the optimism is Wynn's ambitious UAE expansion. The Wynn Al Marjan Island project, expected to open in 2027, could generate $1.8 billion in annual revenue and $500 million in EBITDA by its third year, according to analysts. Morgan Stanley highlighted the UAE opportunity as a unique catalyst, estimating the project alone could add $12 per share to Wynn's valuation. As the exclusive operator in this untapped market for 3-5 years, Wynn is positioned to rake in outsized returns. Investors are also keeping an eye on other growth drivers, including steady performance in Las Vegas and the potential for increased shareholder returns.
Despite the rally, Wynn's stock remains undervalued compared to historical norms, giving investors a compelling risk-reward scenario. Fertitta's entry underscores confidence in the company's trajectory, from premium assets benefiting from Macau's recovery to the underappreciated upside in the UAE. Still, challenges like pending UAE gambling regulations and geopolitical risks in key markets could create headwinds. For now, all eyes are on Wynn, with Fertitta's vote of confidence signaling that big moves could be on the horizon.
