Las Vegas Sands and Wynn Resorts Stocks 2020: Prices, Support Levels, and Q3 Earnings Outlook

During China's Golden Week holiday, Macau hotel bookings showed signs of recovery, signaling potential optimism for casino operators despite ongoing challenges.

In 2020, leading casino companies have faced unprecedented hurdles as the COVID-19 pandemic drastically reduced visitor traffic to top gambling hubs like Las Vegas and Macau. Although there was a brief surge in demand following the reopening of resorts after government-enforced closures, overall activity remains significantly below pre-pandemic levels. Data from casino.org highlights a 39% year-over-year (YoY) decrease in Las Vegas gross gaming revenue (GGR) for August, while Macau experienced a staggering 94.5% decline.

Key Highlights

• Both Las Vegas and Macau saw sharp drops in casino revenues in August due to pandemic-related travel restrictions.
• Las Vegas Sands Corp. (LVS) shares have stabilized between $43 and $45, forming a critical support zone.
• Wynn Resorts, Limited (WYNN) stock has maintained essential support near $69 since late June, with a recent price rebound of nearly 4%.

Positive developments emerged as Morgan Stanley research revealed that 5 out of 23 tracked Macau hotels were fully booked during early October’s Golden Week, reflecting easing restrictions across China. Although this is lower than the 19 fully booked hotels during the same period last year, the figures exceeded expectations.

Technically, Las Vegas Sands and Wynn Resorts are positioned near significant chart support levels ahead of their Q3 earnings announcements. Below is an in-depth analysis of each company, highlighting promising trading opportunities.

Las Vegas Sands Corp. (LVS)

Las Vegas Sands operates integrated resorts offering casinos, hotels, entertainment, dining, retail, and convention facilities. Analysts anticipate a Q3 loss of $0.44 per share, a sharp decline from $0.75 earnings per share in the prior year’s quarter. Revenue is projected at $867.4 million, representing a 73.3% YoY decrease. As of October 21, 2020, LVS holds a market capitalization of $35.3 billion and has declined 32% year-to-date.

Since early May, LVS stock has traded within a consistent range, finding strong support between $43 and $45. Investors entering at this support zone could target a price rally toward $53.50, where resistance is expected from an 18-month horizontal trendline. Setting a stop-loss just below $43 offers a favorable risk/reward ratio exceeding 1:2, based on the October 20 closing price of $46.20 (risking $3.21 per share for a potential $7.30 gain).

Investment Insight

The risk/reward ratio helps investors evaluate the potential returns relative to the risks taken, guiding more informed decision-making in stock trading.

Wynn Resorts, Limited (WYNN)

Founded in 2002 by Steve Wynn, Wynn Resorts operates luxury casino resorts including Wynn Macau, Encore Macau, Wynn Las Vegas, and Encore Las Vegas. Wall Street forecasts a Q3 loss of $2.94 per share, a steep drop from a $0.17 profit in the same quarter last year. Revenue estimates stand at $479.95 million, marking a 71% YoY decline. By October 21, 2020, WYNN shares had fallen nearly 50% year-to-date and about 10% since late July.

WYNN stock has held critical support near $69 since late June, recently climbing almost 4%. Swing traders considering long positions should plan to scale out at resistance levels around $92 or $102.50. Risk management involves placing a stop-loss below the June 29 low at $67.54, with adjustments to breakeven if the price surpasses the multi-month downtrend line.

Trading Tip

Scaling out means gradually selling portions of a stock position as its price rises, allowing investors to lock in gains while still participating in potential further upside.

Disclosure: The author held no positions in LVS or WYNN at the time of writing.

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