Wynn is set to defy consensus and grow its Macau market share to as much as 17.2 percent, if Google search analytics are anything to go by.
According to a new report from Morgan Stanley, consensus estimates predicting Wynn’s market share will grow by just 0.2 percent from 13.5 percent in 2016 to 13.7 percent in 2018 are wide of the mark. Instead, analysis of previous trends based on Google searches suggests that Wynn could in fact be one of the big movers over the next 18 months – particularly in the mass market segment.
“Historical data shows correlation between Google searches and mass market share,” the report says.
“The data incorporates the number of times each property was searched, and translates these results into an Index value, which we compare between all the major properties/operators in the Macau market.”
Delving into Macau’s history, Morgan Stanley and its AlphaWise research team saw mass market share increase soon after Google search numbers increased for both Galaxy Phase 2 and Studio City. Melco Crown saw its Google search index rise from 7 in 1Q14 to 21 in 4Q15, with its mass market share subsequently rising from 15.1 percent to 17.5 percent.
Likewise, Galaxy saw its Google search index rise from 9 to 14 after Phase 2 opened and its mass market share rise from 14.6 percent in 1Q15 to 18.4 percent in 4Q16.
“We believe this bodes well for Wynn Macau,” the report says. Morgan Stanley believes Wynn’s total market share will sit well above the 13.7 percent consensus in 2018, rising to at least 14.4 percent and to as much as 17.2 percent. It also expects the company’s mass market share to rise from 10 percent to 11.5 percent or higher, with Wynn Palace growing from 4.7 percent in 4Q16 to 6.2 percent in 2017 and 7.4 percent in 2018.
The report says there is also a “historical precedent” of Wynn starting slowly before surging.
“Wynn’s original Macau property was able to ramp its market share more than any other property in the market,” it recounted. “In fact, Wynn’s original Macau property missed consensus expectations its first partial quarter, before outperforming for six straight quarters.”