According to a recent investor note from Bank of America, Caesars Entertainment stock has been upgraded from a “neutral” rating to a “buy.” The bank was more cautious about Wynn Resorts, downgrading it from “buy” to “neutral.”
Bank of America emphasized the company’s new digital strategy in relation to the Caesars shift.
Caesars recently sold its overseas casinos to the newly formed Metropolitan Gaming. It then received credit from Bank of America for its extensive domestic presence. Although Las Vegas, where Caesars owns a majority of the Strip, has lagged slightly in the recovery of US gaming, its extensive network of regional casinos stands to benefit from the faster-than-expected recovery in US gambling.
The downgrade of Wynn Resorts can be summed up in one word: Macau. The company has a significant presence in that market (Caesars has no Macanese presence). And the enclave continues due to COVID-19 quarantines in Mainland China. The first week of August saw the lowest revenue since late September 2020. Normally, Macau accounts for 70% of Wynn Resorts’ cash flow.
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