Are losing casino stocks PENN, LVS and WYNN good bets for ‘22?

Posted: 28 December 2021 5:46 pm
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They were 3 of the S&P 500’s biggest losers for 2021. Here are 2 reasons to buy them for 2022 — and 2 reasons to skip them.

Shares of casino stocks Penn National Gaming, Las Vegas Sands and Wynn Resorts ranked among the 10 worst performers of the S&P 500 in 2021, as the industry — and tourism in general — continue to battle COVID-19 and the unknowns of the latest variant, Omicron.

As of this writing, Penn (PENN) is down 36% this year. Las Vegas Sands (LVS) and Wynn (WYNN) resorts are down 34% and 18%, respectively.

This suggests a buying opportunity if you’re convinced they’ll bounce back when the pandemic eases. But are they too much of a gamble right now?

Let’s look at the pros and cons of buying these three stocks.


Here are a couple of reasons these casino stocks might be a buy:

  • Gambling revenue is setting records. US gambling revenue hit $13.6 billion in the second quarter of 2021, a new industry record according to recent American Gaming Association data . This broke the previous quarterly revenue record from the same quarter in 2019 by 22.5%.In all, 2021 is on track to become the highest-grossing year in gaming industry history. If consumer spending continues to rise, 2022 might be another record-setting year for the casino industry.
  • Analysts have higher target prices on each of these three stocks. Analysts see Penn National Gaming hitting $83.59 over the next 12 months, a 62% premium over its current price of $51.60. They expect Wynn Resorts to reach $105.77, up 19%, and Las Vegas Sands to reach $49.13 per share, up 27%.


Consider these drawbacks:

  • Competition is fierce. And not only in Las Vegas, either. Several states have opened their doors for companies to establish brick-and-mortar sportsbooks and online sports betting ever since the Supreme Court legalized sports wagering.Shares of Caesars Entertainment (CZN), another gaming company that actually has done well this year and a major player in sports betting, are up 32% for the year. There may be more than an industry issue hurting those suffering stocks.
  • China’s crackdown on casino operators in Macau. China unveiled plans in 2019 to transform Macau’s reputation from a gambling mecca to a global leisure and tourism hub. Wynn Resorts and Las Vegas Sands each own properties there. Last month, a handful of people were arrested in Macau for illegal gambling and regulators aim to more closely supervise casinos’ operations.

The value of any investment can go up or down depending on news, trends and market conditions. We are not investment advisers, so do your own due diligence to understand the risks before you invest.

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