Wynn's Setup Is 'Compelling,' Says Deutsche Bank

Deutsche Bank issued a note on Wynn Resorts, Limited WYNN seeing an attractive short-term valuation in shares of the company. The firm rates Wynn Resorts as a Buy with a $82 price target.

Analysts Carlo Santarelli and Danny Valoy wrote, "while there remains some risk to Consensus forecasts, largely stemming from Macau, we believe the buy-side bar is low enough ahead of the Cotai opening. We think this creates a scenario whereby shares have the potential to outperform in the near term, should Macau market top line trends remain firm, on a sequential basis, as they largely have since July. We think a solid January and better than expected market results for February set WYNN up well for 1Q16 earnings. "

Shares traded recently at $66.16, up 10.8 percent.

Deutsche Bank gave two key takeaways on why they see strength in Wynn Resorts:

1. Profitability

Deutsche Bank noted that Wynn's Same-Store EBITDA increased in 4Q15 as the company had strong traffic and spending in its resorts, particularly Macau. Going forward, analysts believe that with new retail attributes in Las Vegas, the company has the ability to continue to drive margin growth and expand their brand.

2. Top-line growth

Analysts wrote that Wynn Resorts has begun construction at their Everett facility in Boston as it continues to expand its resorts' global and domestic presence in an effort to achieve revenue growth.