Damo: Raise the target price of Wynn Macau (01128) to HK$6.4 and raise the EBITDA forecast

The Zhitong Finance App learned that Morgan Stanley released a research report stating that in response to the actual performance of Wynn Macau (01128) in the second quarter and expectations for continued strong midfield and slot machine business, the 2026 property EBITDA forecast was raised to 9.2 billion yuan, an increase of 10% over the previous year, and the target price was raised from HK$6.1 to HK$6.4, with a corresponding increase in the rating of “increase in holdings.”

According to the report, the target price increase was mainly due to a 5% increase in free cash flow equity (FCFE) assumptions in 2026, reflecting a 6% increase in the EBITDA forecast, and slightly lower operating expenses and promotion expenses than expected. The bank also expects property EBITDA of 2027 and 2028 to be 9.8 billion yuan and 10.5 billion yuan respectively, an increase of 6% and 7% over the previous year.

Morgan Stanley believes that after the recent increase in dividends, Wynn Macau predicts that the dividend rate will reach about 7.7% even if the dividend remains unchanged, which is attractive.