On Tuesday, Deutsche Bank adjusted its outlook on MGM Resorts International (NYSE:MGM), raising the price target to $52 from the previous $50 while maintaining a Buy rating for the stock. This revision comes ahead of the company's fourth-quarter 2023 results, which are scheduled to be announced on February 13, after the market closes.
The analyst at Deutsche Bank forecasts that MGM Resorts will surpass the current Consensus estimates, citing robust performances in the Las Vegas and Macau markets. The expectation is that the actual figures could exceed not only the Consensus forecasts but also the higher expectations of the buyside.
In light of the positive market trends, Deutsche Bank has increased its EBITDAR (Earnings Before Interest, Taxes, Depreciation, Amortization, and Restructuring or Rent Costs) projections for MGM's operations in Las Vegas to $843M, up from $809M. Similarly, the forecast for Macau has been lifted to $254M from $231M. However, the bank has reduced its EBITDAR expectations for MGM's regional segments and the BetMGM joint venture.
The analyst elaborated that the favorable adjustments, some of which extend into the years 2024 and 2025, have led to the new price target of $52. This outlook reflects the bank's confidence in MGM Resorts' performance and its strategic position within the gaming and hospitality industry. The upcoming earnings report will provide further insight into the company's financial health and future prospects.
InvestingPro Insights
In parallel with Deutsche Bank's optimistic outlook, InvestingPro data indicates that MGM Resorts International is experiencing a strong financial performance. The company's revenue growth over the last twelve months as of Q3 2023 stands at 22.17%, with a significant gross profit margin of 47.93%. Additionally, MGM's stock has demonstrated a robust return over the last three months, with a 16.27% price total return, reflecting the market's positive reception to the company's strategic initiatives.
From an InvestingPro Tips perspective, it's worth noting that MGM management's aggressive share buybacks and the fact that 7 analysts have revised their earnings upwards for the upcoming period align with the positive sentiment expressed by Deutsche Bank. These actions often signal management confidence in the company's future growth and financial strength. Moreover, the company's liquid assets exceed its short-term obligations, offering financial stability and flexibility.
For readers looking to delve deeper into MGM Resorts International's financial outlook and strategic positioning, InvestingPro offers several additional tips. There are currently 11 more InvestingPro Tips available for MGM, providing a comprehensive analysis for investors. To access these insights and enhance your investment strategy, use coupon code SFY24 to get an additional 10% off a 2-year InvestingPro+ subscription, or SFY241 to get an additional 10% off a 1-year InvestingPro+ subscription.
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