Fitch Ratings upgraded luxury casino resort operator Wynn Resorts Ltd. (WYNN) and its subsidiaries a notch closer to investment-grade territory, calling its operating trends "robust," especially in the Chinese gambling enclave of Macau.
The company's earnings have been strengthening recently, largely thanks to growth in Macau as well as improvement in Las Vegas. In its latest quarterly results, Wynn's profit soared on strength in both those markets.
On Friday, Fitch said the Wynn's strong liquidity, brand value and asset quality, as well as the agency's increasing comfort with the company's development plans for a part of Macau called Cotai, support the new rating. It said Wynn's management has a track record of prudent balance-sheet policies.
But Fitch noted high leverage at Wynn's Las Vegas subsidiary and said the rating is under pressure from the company's concentration in two markets and its tendency for multiple dividends, among other factors.
The agency currently rates Wynn at BB, two notches below investment-grade status. The outlook on the rating is positive.
Wynn shares were up 2.1% at $160.78 in recent trading. The stock has risen 55% so far this year, better than the wider market