Crown Resorts Ltd (ASX:CWN) shares added to leading broker’s conviction buy list

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).

And here's another share that has been named as a buy this week. It has been tipped for big things in FY 2019.

Top Australian Stock Picker Just Issued Rare “Double Down” Buy Alert

Discover why this legendary Australian stock-picker just issued a “Double Down” buy alert to his exclusive group of insiders… and why he’s convinced this might be the single most attractive entry point for years to come.

Simply click here to get started and access our secure sign-up page.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Crown Resorts Limited. The Motley Fool Australia has recommended Sky City Entertainment Group Ltd. and Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.