On Thursday, JPMorgan raised its price target for MGM Resorts International (NYSE:MGM) stock to $52 from $48, while maintaining an Overweight rating. The adjustment follows MGM's fourth-quarter earnings, which surpassed expectations with property-level EBITDAR (Earnings Before Interest, Taxes, Depreciation, Amortization, and Restructuring or Rent Costs) reaching $1.24 billion, beating both JPMorgan's and the Street's projections. The company, currently valued at $11.2 billion, has demonstrated strong momentum with a 10.65% year-to-date return. According to InvestingPro data, MGM has maintained healthy financials with $17.2 billion in revenue and 6.66% revenue growth over the last twelve months.
MGM's Las Vegas operations were a significant contributor to the strong performance, with EBITDAR of $765 million exceeding estimates. The company's Macau and regional properties also performed well, with EBITDAR figures surpassing expectations. The analyst noted record domestic operations in January, including all-time highs in occupancy, average daily rates (ADRs), slot handle, and restaurant revenue. InvestingPro analysis reveals that four analysts have recently revised their earnings estimates upward for the upcoming period, suggesting continued optimism about MGM's performance. For detailed insights and additional ProTips about MGM's growth trajectory, investors can access the comprehensive Pro Research Report available on InvestingPro.
The company experienced strong underlying trends in the fourth quarter, excluding variance related to the Formula 1 event and hold. December saw record slot handle and slot win, while convention bookings were 43% higher than the previous record month. Despite a challenging comparison due to last year's Super Bowl in Las Vegas, MGM anticipates recouping a $65 million year-over-year EBITDAR variance throughout 2025.
MGM management expects to capture approximately $150 million in operational EBITDA efficiencies in 2025, part of a $200 million total announced in a previous earnings call. This will partially offset the impact of a $300 million room renovation at MGM Grand, slated for completion by year-end.
In Macau, MGM reported positive trends during the Chinese New Year period, with an 18% increase in traffic and year-over-year growth in gaming volumes. The company observed a "longer-tail" to the holiday, with a surge in players arriving after the official celebrations.
For 2025, JPMorgan has raised its total property-level EBITDAR estimate for MGM to $5.14 billion, up from $5.09 billion, and adjusted segment forecasts for Las Vegas, U.S. Regionals, and Macau. The firm also provided projections for 2026, forecasting continued growth in property-level EBITDAR across all segments, albeit at a more modest pace compared to the Street's expectations. InvestingPro data shows MGM trading at a P/E ratio of 15.74, with management actively buying back shares. The company maintains a "GOOD" overall financial health score of 2.58, suggesting solid fundamentals supporting its growth trajectory.
In other recent news, MGM Resorts International reported fourth-quarter earnings with a normalized EPS of $0.45, exceeding consensus estimates by $0.11, and revenues of $4.35 billion, surpassing projections by $80 million. Despite a decline in Las Vegas revenues, the company experienced growth in other segments, including regional revenues, MGM China (OTC:MCHVY), and Digital. CFRA upgraded MGM Resorts' stock rating to Buy, raising the price target to $45, citing the company's share buyback program as a significant factor. Mizuho Securities also increased its price target for MGM Resorts to $60, maintaining an Outperform rating and highlighting expectations of stable financial performance despite some one-time expenses.
Truist Securities maintained a Buy rating and a $50 price target, noting strong results from regional operations and Macau, and a positive outlook for the first quarter in Las Vegas. Stifel analysts raised their price target to $50, emphasizing MGM's potential for growth in Las Vegas and the company's robust forward bookings for group and convention events. Citi analyst George Choi also increased the price target to $50, maintaining a Buy rating and noting MGM's strong performance and share repurchase strategy as key factors. These developments reflect a generally optimistic outlook for MGM Resorts among analysts, with various firms highlighting different aspects of the company's performance and strategy.
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