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An analyst jacked up her Q4 estimates to unrealistic levels.

We were fans of WYNN and its Q4 outlook.  Expectations were creeping up along with the stock price and today Bernstein dropped a bomb.  Their Revenue and EPS estimates went to $878 million and $0.46 up from $771 million and $0.13, respectively.  Consensus is $0.10 and $781 million.  That’s quite an outlier.  Why they still have a market perform rating and a $64 price target on the stock with those estimates is a another issue.

In our 1/8/09 note we discussed higher numbers for WYNN.  While there could be upside to our $818 million revenue estimate and our $204 million EBITDA estimate, we think Bernstein is over the top, potentially setting the stage for a disappointment come earnings day.  EPS is less important for WYNN but our projection there is $0.17. 

Now that Q4 expectations have been ratcheted up the focus should be on the forward numbers.  The Baccarat business in Vegas and Macau has been off the charts.  Is it sustainable?  We worry about the sequential slowdown in the Chinese economy, the waning federal stimulus, and the Chinese stock market.  These macro variables could deflate the baccarat VIP “bubbles” in both Las Vegas and Macau.