12 Best Hotel Stocks To Buy According to Analysts

2. Wynn Resorts, Limited (NASDAQ:WYNN)

Analyst Upside Potential: 50.27%

Number of Hedge Fund Holders: 52

Wynn Resorts, Limited (NASDAQ:WYNN) designs, develops and operates integrated resorts that feature luxury hotel rooms, dining and entertainment options, high-end retail space, convention and meeting facilities, and gaming. Its segments include Wynn Macau, Wynn Palace, Las Vegas Operations, Wynn Interactive, and Encore Boston Harbor.

Wynn Resorts, Limited (NASDAQ:WYNN) is strategically focused on investing in its existing properties and expanding its operations, particularly with the development of Wynn Al Marjan Island in the United Arab Emirates (UAE). Reporting on the construction progress of Wynn Al Marjan Island, the company said that the project is proceeding as planned, with 55% of the structural concrete completed.

The first integrated resort in the UAE is currently expected to open in 2027. Wynn Resorts, Limited (NASDAQ:WYNN) estimates that the UAE will be a gaming market worth $3 billion to $5 billion and one of the most exciting new markets in the industry. The company also has a strong liquidity position, with a global cash and revolver availability of $3.5 billion as of September 30. This comprises $1.7 billion of total cash and available liquidity in Macau and $1.8 billion in the U.S.

Baron Real Estate Fund stated the following regarding Wynn Resorts, Limited (NASDAQ:WYNN) in its fourth quarter 2023 investor letter:

“The shares of Wynn Resorts, Limited (NASDAQ:WYNN), an owner and operator of hotels and casino resorts, declined modestly in the most recent quarter, in part due to concerns about economic weakness in China.

We remain optimistic about the multi-year prospects for the company. We believe the ongoing re-emergence of business activity in Macau will drive additional shareholder value. If cash flow returns to the level achieved in 2019 prior to COVID-19, we believe Wynn’s shares will increase 30% to 50% higher than where they have recently traded.

We believe additional drivers for future value creation beyond a re-emergence in Macau business activity include: (i) our expectation for long-term growth opportunities in the company’s U.S.-centric markets of Las Vegas and Boston, including an expansion of Wynn’s Encore Boston Harbor resort; (ii) Wynn’s plans to develop an integrated resort in the United Arab Emirates with 1,500 hotel rooms and a casino that is similar in size to that of Encore Boston Harbor; (iii) opportunities to improve cash-flow margins by rightsizing labor and achieving lower staff costs in Macau; (iv) the possibility that Wynn is granted a New York casino license; and (v) an expansion in the company’s valuation multiple to levels achieved prior to the pandemic.”