GOLDMAN: These Stocks Equal Great Buys

Wynn Resorts

Wynn Resorts

Thomson Reuters

Ticker: WYNN

Sector: Consumer Discretionary

Dispersion Score: 5.6

Upside to Price Target: 89%

Executive Comment: “We enjoy a segment of the market that we wanted to continue to enjoy, the upper premium, the VIP business and the top end of the mass marketing. We enjoy that advantage today and we intended to increase that advantage by the opening of Wynn Palace, such worthy assumptions of its creation, and I’m happy to say that that was the result of the construction and the development,” said CEO Steve Wynn.

UPDATE : Sept 23

Wynn Resorts (WYNN) Stock Falls on Fitch Ratings’ Lower Macau Gaming Revenue Forecast

NEW YORK (TheStreet) — Shares of Wynn Resorts were falling by 3% to $62.01 on Wednesday morning, after Fitch Ratings revised its Macau gaming growth forecast for 2015.

The statistical ratings firm said it now expects Macau gaming revenue to decline between 33% and 34% in 2015, down from its previous forecast of a 29% decline.

Fitch Ratings said that gaming revenues in Macau are down 36.5% year to date through August, which reflects on the difficult first-half 2014 comparison, and pressures such as a corruption crackdown in China that took a toll on gaming.

The ratings firm said that Macau’s decision to loosen its visa restrictions “should produce some positive benefit, underscoring that Macau is willing to use certain levers to prop up its gaming-centric economy.”

Fitch Ratings said it expects Macau gaming growth in 2016 to be “relatively flat,” citing the positive impact of new properties opening in the region next year.

The lower 2015 Macau gaming revenue forecast helped bring down shares of casino operators with properties in the region, including Wynn Resorts.

Separately, TheStreet Ratings team rates WYNN RESORTS LTD as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

“We rate WYNN RESORTS LTD (WYNN) a HOLD. The primary factors that have impacted our rating are mixed — some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and weak operating cash flow.”

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 37.14% is the gross profit margin for WYNN RESORTS LTD which we consider to be strong. Regardless of WYNN’s high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.42% trails the industry average.
  • WYNN, with its decline in revenue, underperformed when compared the industry average of 4.0%. Since the same quarter one year prior, revenues fell by 26.3%. Weakness in the company’s revenue seems to have hurt the bottom line, decreasing earnings per share.
  • WYNN RESORTS LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Stable earnings per share over the past year indicate the company has managed its earnings and share float. We anticipate this stability to falter in the coming year and, in turn, the company to deliver lower earnings per share than prior full year. During the past fiscal year, WYNN RESORTS LTD’s EPS of $7.17 remained unchanged from the prior years’ EPS of $7.17. For the next year, the market is expecting a contraction of 54.4% in earnings ($3.27 versus $7.17).
  • Despite any intermediate fluctuations, we have only bad news to report on this stock’s performance over the last year: it has tumbled by 60.15%, worse than the S&P 500’s performance. Consistent with the plunge in the stock price, the company’s earnings per share are down 72.00% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • Net operating cash flow has decreased to $201.34 million or 45.41% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm’s growth is significantly lower.
  • You can view the full analysis from the report here: WYNN

Viacom Inc.

Viacom Inc.

REUTERS/Lucas Jackson

Ticker: VIAB

Sector: Consumer Discretionary

Dispersion Score: 3.3

Upside to Price Target: 52%

Executive Comment: “Viacom is seizing every opportunity. Many of our brands speak to the younger audiences that are at the leading edge of the evolution of media. This has always proven to be an advantage over the years and will again as we accelerate our investment in initiatives, platforms and content. We continue to do the hard work to confidently move forward and lead our industry through the latest pivot,” said CEO Philippe Dauman

Dollar Tree Inc.

Dollar Tree Inc.

@BrianSozzi

Ticker: DLTR

Sector: Consumer Discretionary

Dispersion Score: 2.1

Upside to Price Target: 44%

Executive Comment: “Dollar Tree continues to be part of the solution for millions of consumers as they strive to balance their household budget. We serve a very loyal and growing customer base. Our commitment is to continue serving our existing customers better while taking every opportunity to gain new customers in every store every day,” said CEO Bob Sasser.

United Continental Holdings

United Continental Holdings

Getty Images/Scott Olson

Ticker: UAL

Sector: Industrials

Dispersion Score: 3.9

Upside to Price Target: 35%

Executive Comment: “The second quarter was a very good quarter for United and I am proud of the work our employees have done to deliver record earnings which benefit all our constituencies, including our employees themselves. We have a great deal of confidence in our future as we work to make United the carrier of choice,” said CEO Jeff Smisek.

Urban Outfitters

Urban Outfitters

Flickr/Mike Mozart

Ticker: URBN

Sector: Consumer Discretionary

Dispersion Score: 3.5

Upside to Price Target: 34%

Executive Comment: “All brands have carefully, but steadily, offered larger, non-redundant product assortments across a number of categories and, in several cases, have added entirely new categories. At the same time we are launching initiatives to make very important operational improvements, like better category distortion in stores, faster reaction to customer demand, more efficient use of store space, and better integration of technology,” said CEO Richard Hayne.

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