Crown Resorts Share Price Hurt by Coronavirus (ASX:CWN)

By ,

At time of writing, the share price of Crown Resorts Ltd [ASX:CWN] is down 3.02%, trading at $7.06.

Crown is an Australian company engaged in the gaming and entertainment business, with its largest location being in central Melbourne, coupled with locations in the United Kingdom and Macau.

The $5 billion company has been hard hit by the coronavirus — shedding more than 40% since 20 February.

According to an announcement made today, following consultation with the Victorian Government, Crown has implemented a policy covering a number of social distancing measures at its Crown Melbourne entertainment complex.

In effect from today, the measures include closing off every second gaming machine to distance people from each other, no doubt impacting Crown’s capacity to create income.

Coronavirus aside, Crown resorts were already experiencing softer trading conditions.

Crown Share Price Chart 1

Source: Optuma

In February this year, Crown announced their half-yearly results with growth being largely flat compared to the year prior.

Chief Executive Officer Ken Barton noted that whilst some areas of the business were encouraging, others such as the VIP gaming at the Australian resorts was down 34.2% on the year prior.

Crown share price in a free fall

With poorer results than expected can Crown fight off the coronavirus?

Crown Share Price Chart 2 - ASX CWN

Source:Optuma

Since September 2015, Crown’s share price has largely moved in a sideways pattern, bouncing between $9.80 and peaking at $14.59. At the start of December 2019, a downtrend in price started to emerge as can be seen in the above chart.

The last significant peak occurred at the end of November 2019, with a high of $13.25. The price fell from here on the expectation of weaker earnings. But once the coronavirus was injected into the situation, it went into a free fall to a price of $7.28 at the time of writing, representing a drop of over 45% from the high in November:

Crown Share Price Chart 3 - ASX CWN

Where to from here?

Tourism set to wane, Crown share price could go as low as $4.20

The outlook for Crown and the Australian market overall is dire at present, to say the least. The Australian recently interviewed one investor who said that the Global Coronavirus Crash (GCC) is already beginning.

This combines with poor economic data released by China on Monday, which showed that the country’s output was pummelled by the coronavirus outbreak in January and February. The world’s second biggest economy looks unlikely to recover any time soon, according to CNN Business.

With Chinese tourism set to wane, this will have a direct impact on the Australian market and Crown.

Crown Stock Price Chart 4 - ASX CWN

Source: tradingview.com

With no end in sight for the impact of the coronavirus at this stage, the Crown share price may very well continue down to the next resistance level of $6.42, and should it fall below that, Crown may be looking at a price of $4.20 in the not too distant future.

Regards,

Carl Wittkopp,
For Money Morning

PS: ‘The Coronavirus Portfolio’ — the two-pronged plan to help you deal with the financial implications of COVID-19. Download your free report now.

About Carl Wittkopp

Carl Wittkopp writes for Money Morning and has a diploma in Financial Planning. He specialises in technical analysis.

Crown Resorts Ltd Shares Up 8% on $8.87 Billion Takeover Offer (ASX:CWN)

Crown Resorts [ASX:CWN] shares spiked in morning trade by over 8% after the casino group received an improved takeover offer from persistent US investment titan Blackstone.

ASX 200 News Weekly Wrap — Magnis, Creso, Cettire, Crown and Commonwealth Bank

We review this week’s ASX news, from MNS and CPH getting caught up in ASIC probes to CBA shares tanking on their latest quarterly.

Crown Casino on the Brink, But What about the ASX Casino?

The ASX Casino is its own kind of beast, and a quick jaunt onto the pages of Reddit’s ASX­_Bets reveals a thriving culture of gambling interspersed with the odd nugget of sound reasoning.

Crown Share Price Soars on $8 billion Blackstone Offer (ASX:CWN)

The Crown Resorts Ltd’s [ASX:CWN] share price is up more than 18% in early trade after confirming an $8 billion offer from Blackstone. The Crown share price is up 18.4%, trading at $11.675 per share…

Crown Resorts Share Price Sinks as Directors Resign (ASX:CWN)

The share price of casino operator Crown Resorts Ltd (ASX:CWN) has fallen today following revelations that Crown is unfit to operate its Barangaroo casino. At time of writing the share price of Crown has fallen by 32 cents or 3.15%…

Crown Resorts Share Price Flat on New Operating Conditions (ASX:CWN)

At time of writing the share price of Crown Resorts Ltd [ASX:CWN] moved down 0.31% to trade at $9.76. Crown spent a large part of the year closed as COVID-19 shut down public spaces and forced people into lockdown…