The Crown Resorts Ltd (ASX: CWN) share price had a solid finish to the week.
The casino and resorts operator's shares closed the day over 2% higher at $13.69.
Why did Crown Resorts' shares climb higher today?
Crown Resorts' shares were given a boost today following the release of a positive broker note out of Goldman Sachs.
According to the note, the broker has added the company's shares to its conviction buy list with an improved price target of $16.00. This price target implies potential upside of almost 17% excluding dividends over the next 12 months even after today's gain.
The broker made the move following a detailed analysis of the company's $2.2 billion Crown Sydney Hotel Resort project.
Goldman expects the property to drive significant incremental market share in the Australia and New Zealand gaming industry for the company. It estimates that it will generate $18 billion in VIP turnover and $122 million in table revenues when the project completes in FY 2021.
While FY 2021 may still be some time away, the broker expects the market to factor Crown Sydney's earnings into its share price in the coming months. This is because the project is nearing two years from completion and potentially less than 12 months away from when the broker expects the market to begin valuing the company's shares on its FY 2021 base earnings year.
Based on its estimates, Crown is trading at 8.4x FY 2021 EV/EBITDA, which compares favourably to peers Star Entertainment Group Ltd (ASX: SGR) and SKYCITY Entertainment Group Limited (ASX: SKC).
Should you invest?
I think Goldman Sachs makes a great point on Crown Resorts and believe the Crown Sydney Hotel Resort project makes it a great buy and hold investment option, especially with the inbound tourism boom showing no signs of slowing.
Overall, I feel Crown Resorts would be a great option in the travel and tourism sector alongside the likes of Corporate Travel Management Ltd (ASX: CTD) and Webjet Limited (ASX: WEB).
