UBS reduced its price target for Wynn Resorts (NASDAQ:WYNN) to $146 from $148 while leaving its rating at Buy. The shares are trading at $105.27, and InvestingPro analysis identifies the stock as appearing undervalued when measured against its Fair Value assessment.
UBS framed the company's outlook as shifting away from a development-centric profile toward one defined by returning free cash flow to shareholders. That change is expected to accelerate as Wynn's cash flow becomes more geographically diversified once the Al Marjan property opens in the first quarter of 2027. The firm highlighted that Wynn generated $737 million in levered free cash flow over the trailing twelve months, a figure UBS sees as underpinning the strategic move toward capital returns.
The analyst note also addressed dividend policy and timing. Wynn Resorts intends to lift dividends from its Wynn Macau unit over time, but UBS says that is more likely to occur once Macau-related capital expenditure commitments are fulfilled after 2027. By contrast, the parent company is viewed as having the ability to return capital to shareholders sooner than the Macau dividend timeline.
Looking ahead, UBS expects that after the Al Marjan opening in early 2027 and the completion of the Encore room remodel, Wynn should produce materially higher free cash flow than it does today. The firm believes the company has reached a scale that will permit larger capital returns even if selective development projects move forward. UBS does not expect potential development to require substantial capital in 2027, even if a project proceeds.
An InvestingPro note included in the coverage points to aggressive share repurchases by management as further evidence of an emphasis on shareholder returns.
Wynn's most recent reported quarter produced mixed results. Fourth-quarter 2025 earnings per share came in at $1.17, missing analysts' consensus of $1.47 and representing a 20.41% negative surprise versus estimates. Revenue for the quarter was $1.87 billion, topping the projected $1.85 billion. The divergence between revenue outperformance and an EPS shortfall prompted a negative reaction from investors, and the company's shares fell following the announcement. UBS and other analysts did not report upgrades or downgrades in the immediate aftermath of the results.
Investors and market watchers are positioned to monitor Wynn for progress on the Al Marjan opening, the completion of Encore room renovations, and any shifts in capital return timing. The balance between continued development optionality and an increasing focus on free cash flow distribution will be central to how the market values the stock going forward.