MGM Resorts Set for Significant Surge with 20% Upside Predicted by Analysts

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Despite a sluggish start to 2024, which was marked by a loss of 3.11% during most of the year, promising signs are on the horizon for the MGM Resorts International (NYSE: MGM) stock. Over the past month, there has been a surge of 7.66%, indicative of a possible turnaround. This speculation isn’t unfounded, as several industry analysts share this positive outlook.

One such analyst is Clark Lampen from BTIG, who recently initiated coverage of the casino giant, championing a “buy” rating accompanied with a promising $52 price target. From today’s closing price at $43.28, Lampen’s target translates into a staggering upside of just over 20%. Firmly believing that this isn’t merely a flash in the pan, Lampen predicts the stock’s upward trajectory will continue with the help of escalating earnings and revenue estimates.

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As one of MGM Resorts’ steadfast sources of strength, the Las Vegas Strip, along with Macau, are expected to significantly contribute to this optimistic projection, especially with persistent capital return efforts in the pipeline. As a part of this strategy, there’s talk of a potential dividend from the MGM China unit. This subsidiary, 56%-owned by the Las Vegas-based parent company, operates two integrated resorts in Macau.

MGM Resorts International, over the years, has made it a priority to buy back its shares, reaffirming their healthy financial position. This commitment is clearly illustrated by the fact that since 2021, MGM has managed to reduce its shares outstanding by a commendable 36% due to successive share buyback initiatives.

Another area where MGM is set to make strides is the digital space. Lampen’s report lauds MGM’s digital operations, along with its considerable presence on the Las Vegas Strip, where it ranks as the largest operator.

Furthermore, MGM’s recent announcement about its intention to acquire the US operations of Tipico Sportsbook through its LeoVegas brand shows a commitment to bolstering tech capabilities. This unfolding narrative about MGM’s digital growth, according to Lampen, is yet to receive its due credit amongst market watchers.

Additionally, Lampen believes the company could reap benefits from the possible sale of regional casinos, despite the challenges posed by the current interest rate environment and the need for alternative financing for potential buyers. One thing is clear: the overall picture suggests that MGM Resorts International is poised for an upward surge, and industry insiders are paying attention.