Wynn Resorts stock price drops after Wall St. downgrade
Some Wall Street analysts are downgrading shares of Wynn Resorts (WYNN) after CEO Steve Wynn was accused of sexual misconduct, which he denies.
Analysts at UBS changed their rating of the stock from "buy" to "neutral," citing allegations first reported Friday that Wynn harassed or assaulted a number of female employees.
"We believe risk to the outlook has increased as well, with recent allegations about the CEO prompting an investigation by the company's board as well as reviews by the gaming regulatory bodies in Nevada and Massachusetts," wrote UBS analysts Robin Farley and Arpine Kocharyan in a note. "These allegations and subsequent investigations will likely cap near-term upside in the stock, in our view, so the stock's outperformance combined with increased uncertainty in the outlook have prompted our downgrade."
Previously, Morgan Stanley dropped its rating of Wynn Resorts to "equal weight" from "overweight," Bloomberg reported.
The company's stock traded at $165.79 a share Monday morning, a drop of nearly 17 percent since Friday, when the Wall Street Journal reported that several women have the casino mogul of sexual harassment and assault. The paper reported that several of women claim Wynn harassed or assaulted them, including one manicurist who alleged that the mogul forced her to have sex with him. Wynn paid the woman $7.5 million to settle the case.
Wynn denies the allegations, saying they are part of a smear campaign orchestrated by his former wife, Elaine Wynn. Since the Wall Street Journal reported the accusations, Wynn has stepped down from his role as the finance chairman of the Republican National Committee.