We expect casino operator,
Wynn Resorts Ltd.
), to beat expectations when it reports first quarter 2014
results on May 1, 2014. Last quarter, it posted a positive
earnings surprise of 30.46%. We note that Wynn Resorts has
outperformed the Zacks Consensus Estimate in three of the
preceding four quarters with an average positive surprise of
17.76%. Let's see how things are shaping up for this
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WYNN RESRTS LTD (WYNN): Free Stock Analysis
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Why a Likely Positive Surprise?
Our proven model shows that Wynn Resorts is likely to beat
earnings because it has the right combination of two key
Positive Zacks ESP:
Expected Surprise Prediction or
, which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, stands at +1.90%. This
is meaningful and a leading indicator of a likely positive
earnings surprise for shares.
Wynn Resorts carries a Zacks Rank #2 (Buy). Note that stocks with
Zacks Ranks #1, 2 or 3 have a significantly higher chance of
beating earnings. The Sell-rated stocks (#4 and 5) should never
be considered going into an earnings announcement.
The combination of Wynn Resorts' Zacks Rank #2 and +1.90% ESP
makes us confident about an earnings beat.
What is Driving the Better-Than-Expected
Over the past two quarters, Macau has remained a major
contributor to Wynn resorts' revenues demonstrating that the
company has started to reap benefits from the recovery of the
mass market category in Macau. Gaming revenues in Macau were
strong in the first quarter as well, increasing 20.1% in the
quarter, according to the Gaming Inspection and Coordination
Bureau. This indicates that Wynn Resorts would likely continue to
generate solid sales from its Macau operations in the first
quarter of the year.
Meanwhile, Wynn Resorts is also experiencing improved business in
Las Vegas as leisure demand continues to improve with a gradual
recovery of the U.S. economy. The visitation pattern in Las Vegas
is improving and management remains hopeful on higher average
daily rates. Additionally, to boost performance in Las Vegas, the
company has remodeled the rooms at its properties and the
Other Stocks to Consider
Here are some companies in the gaming industry and broader
consumer discretionary sector that you may want to consider as
our model shows they have the right combination of elements to
post an earnings beat this quarter:
) with Earnings ESP of + 20.0% and a Zacks Rank #3 (Hold).
Cablevision Systems Corp.
) with Earnings ESP of + 100.0% and a Zacks Rank #3.
The Walt Disney Co.
) with Earnings ESP of + 1.03% and a Zacks Rank #2.