On Wednesday, Wynn Resorts Ltd (NASDAQ:WYNN) received an upgraded outlook from corporate bond research firm Gimme Credit, shifting from "Deteriorating" to "Stable." The upgrade reflects a significant rebound in the Macau gaming sector, which is a critical revenue source for the company. Prior to the global health crisis, nearly three-quarters of Wynn's EBITDA was generated from its operations in the China special administrative district.
The improved performance in Macau has led to a marked reduction in Wynn Resorts' leverage, said Gimme Credit. While there are ongoing concerns about the broader economic situation in China, the company's credit metrics are expected to remain stable in the near term. This positive shift is attributed to the dramatic recovery in Macau's gross gaming revenue.
Wynn's financial health has seen a considerable boost, thanks to the strong showing of both its Macau and domestic casino operations. The recent financial data indicates that the company is making very positive strides when compared to past performance. The surge in travel following the pandemic has been particularly beneficial for Wynn Resorts, which is known for its high-end lodging and renowned casino experiences.
Wynn Resorts' ability to capitalize on the improving travel trend has been a significant factor in the improved credit rating. The firm's outlook suggests that as long as the current trajectory in Macau continues, Wynn's financial stability should remain on solid ground.