Wynn Resorts Ltd (WYNN)

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The 2 Worst Stocks to Sell During Economic Turmoil
By: Stock News | August 16, 2022

• WYNN – The stock market remains highly volatile, with inflation still hovering near a 40-year high and the Fed’s consecutive rate hikes to combat it. Moreover, the rising tension between China and Taiwan is adding to the geopolitical issues. Given the uncertainties ahead, it might be best to avoid fundamentally bleak stocks, Wynn Resorts (WYNN) and Boot Barn Holdings (BOOT).

The stock market has witnessed its worst first half in over 50 years in 2022 due to the Russia-Ukraine war, the multi-decade high inflation, and the Fed’s interest rate hikes to tame the rising prices. On the other hand, the conflict brewing between China and Taiwan could worsen the geopolitical crisis.

Additionally, a resilient job market could prompt the Fed to go ahead with another steep interest rate hike to thwart inflation, tempering recession fears. Moreover, Federal Reserve Chairman Jerome Powell has raised the possibility of a third-straight 0.75-percentage point rate hike. “Another unusually large increase could be appropriate” at the September meeting, he said.

Given the uncertain macro environment, we think it could be best to avoid fundamentally weak stocks Wynn Resorts, Limited (WYNN) and Boot Barn Holdings, Inc. (BOOT).

Wynn Resorts, Limited (WYNN)

WYNN designs, develops, and operates integrated resorts through its Wynn Palace, Wynn Macau, and Las Vegas Operations segments.

For the fiscal second quarter ended June 30, 2022, WYNN’s total operating revenues decreased 8.2% year-over-year to $908.83 million. Net loss increased 23.1% from the prior-year quarter to $213.42 million, while operating loss came in at $52.03 million, up 76.2% year-over-year. Net loss per share came in at $1.14.

The consensus revenue estimate of $870.69 million for the fiscal first quarter ending September 2022 indicates a 12.5% year-over-year decline. Analysts expect its EPS to come in at a negative $1.09 in the same period. The company also missed the consensus EPS estimates in all the trailing four quarters.

In terms of its forward Price/Sales, WYNN is currently trading at 1.98x, 98.1% higher than the industry average of 1x. Its forward EV/Sales multiple of 4.35 is 257.8% higher than the industry average of 1.22.

The stock has declined 30.3% over the past nine months to close the last trading session at $68.33.

WYNN’s POWR Ratings reflect this bleak outlook. The stock has an overall rating of D, equating to Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

WYNN has a Value, Sentiment, and Stability grade of D. In the 29-stock, D-rated Entertainment – Casinos/Gambling industry, it is ranked #23.

Click here to see the additional POWR Ratings for WYNN (Growth, Momentum, and Quality).

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