In the world of corporate gaming, MGM Resorts International (NYSE: MGM) is currently experiencing a significant downtrend in its stock value. The casino mogul’s stock is trailing by a considerable 4.10% since the beginning of the year, a lukewarm performance when compared to the robust S&P 500. Moreover, recent days have seen a further drop of 7.45%, painting a somewhat bleak image for the gambling giant.
However, the current financial malaise hasn’t deterred analysts from having a bullish outlook on MGM. They genuinely believe that MGM’s stock is ripe for a short-term revival. This optimism is fueled as MGM prepares to release its first-quarter earnings report, scheduled for Wednesday, May 1, after the close of US markets. This announcement, coupled with the stock’s favorable technical setup, can potentially nudge the dwindling stock towards a period of recovery.
To gain an understanding of what has analysts hopeful, one needs to look at MGM’s current trading behavior within the context of its 126-day moving average. Over the past three years, six similar signals were triggered on the MGM stock, resulting in a higher closing position roughly 67% of the time. This signaled an average one-month gain of 4.4%. If MGM can maintain its current position and repeat this trend, the result will see the stock elevated to nearly $45 per share.
In simplified terms, MGM’s stock often rallies when exhibiting similar technical traits we’re seeing today. MGM’s stock, deemed as oversold by Schaeffer’s Research, could be poised for a much-needed rebound.
Amidst this year’s tumultuous journey, MGM remains a darling among sell-side analysts. Seaport Research analyst Vitaly Umansky, for instance, started a fresh coverage of the MGM’s stock and rated it as a “buy” with an ambitious $56 price target.
Umansky’s optimism stems from the anticipatory revenues from MGM’s established presence in Macau. He predicts the gross gaming revenue in Macau will post a compound annual growth rate of 18% from 2023 through 2025. MGM owns 56% of MGM China, which operates two integrated resorts in this special administrative region. Bank of America’s Shaun Kelley also echoes this bullish sentiment on MGM.
On home turf, Las Vegas, MGM is predicted to post first-quarter results that align with estimates – a desirable position when compared to rival Caesars Entertainment, which is speculated to miss its mark.
However, the future of MGM is based not only on what’s happening now, but also on what might transpire in the near future – for instance, the potential sale of underperforming regional casinos in Massachusetts and Ohio. Furthermore, the company’s efforts to repurchase stock, mitigate debt, and make strides against competitors such as DraftKings and FanDuel with BetMGM could inspire even greater investor confidence.
Across boardrooms and trading floors, eyes are focused on MGM Resorts International as it navigates a path swirling with hope, uncertainty, and enormous potential.
