Wynn Resorts: More Upside Potential Remains

| About: Wynn Resorts, (WYNN)

Back in late December 2011, I wrote an article on Seeking Alpha recommending Wynn Resorts (NASDAQ:WYNN). At the time, Wynn Resorts was trading at $105.65/share. I suggested using June 2012 $120.00 call options. Needless to say, this was a great trade.

Currently, Wynn Resorts is trading at $127.27/share. The 52-week range is $101.02 - $172.58.

52wk high: 172.58
52wk low: 101.02
EPS: 4.88
PE: 26.10
Div Rate: 2.00
Yield: 1.5715
Market Cap: 12.79 B
Volume: 14.15 M

Wynn Resorts engages in the development, ownership, and operation of destination casino resorts. The company owns and operates two casino resort complexes in Las Vegas-- the Wynn Las Vegas and Encore at Wynn Las Vegas, with approximately 4,750 hotel rooms and suites; 220 table games; 2,430 slot machines; and 1 poker room in approximately 186,000 square feet of casino gaming space, including a sky casino and private gaming salons.

The question to ponder is if Wynn has run-up too much, and is there any upside left? I believe there is. I still like Wynn Resorts' upside potential more than MGM Resorts (NYSE:MGM), Las Vegas Sands (NYSE:LVS), or most other casino stocks, even though I am still bullish on all of them. When the economy improves, casino stocks perform well too.

I feel confident that Wynn is heading toward $150.00/share relatively soon. The stock is still well off of its 52-week high of $172.58.

On Friday, the stock was halted for trading for about an hour and a half. It was a bizarre day for Wynn. Rumors of a possible Macau deal shot the stop up over $10.00/share at one point in early trading on Friday. Right before the stock resumed trading, it was announced that there was a false filing by Wynn. I initially thought the stock would drop a lot, but it held up extremely well on Friday-- a good sign.

Also on Friday, Steve Wynn, the CEO of the company, announced plans of a casino resort near the New England Patriots home stadium.

Analyst opinion on the price target is varied, but the consensus seems to be $150.00/share. I agree with this, but would not put $170.00/share out of the equation.

Price Target Summary

Mean Target: 141.50
Median Target: 142.50
High Target: 189.00
Low Target: 88.00
No. of Brokers: 22

03-Feb-12 Reiterated Brean Murray Buy $161 → $153
05-Jan-12 Initiated Compass Point Sell $88
28-Nov-11 Upgrade Needham Hold → Buy $145
28-Nov-11 Upgrade KeyBanc Capital Mkts Hold → Buy $145
12-Aug-11 Upgrade Barclays Capital Equal Weight → Overweight
19-Jul-11 Reiterated Barclays Capital Equal Weight $125 → $160
07-Jul-11 Initiated Brean Murray Buy $175
20-Apr-11 Reiterated Hudson Securities Hold $129 → $146
20-Apr-11 Reiterated Deutsche Bank Buy $141 → $148
11-Feb-11 Reiterated Barclays Capital Equal Weight $102 → $105

To summarize, I recommend holding any call options you still have and purchasing more on any daily pullback. If you have not yet initiated a position, I would start out by purchasing June 2012 $135.00 call options.

Disclosure: I am long WYNN.