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Post dated: April 15, 20,24 at 06:29h
Last Updated on April 15, 2024 at 06:29h
MGM Resorts International is having a difficult time. Shares of the casino operator are lower by 4.10% year-to-date, badly lagging the S&P 500, and things have been worse in recent days as highlighted by a 7.45% decline over the past week.
Some analysts remain bullish, stating that the stock could have a plausible near-term recovery. This assessment is made ahead of Wednesday’s earnings report for the first quarter, scheduled to be released after US market close on May 1. It could even be worse. Catalyst for moribund stocks As could its advantageous technical setup.
MGM trades within 1 standard deviation from its 126 day moving average. Schaeffer Investment Research reports that according to Schaeffer’s Senior Quantitative Analysis Rocky White’s data, the stock has finished higher in 67% of cases, on average with a 4.4% gain per month. A similar move, from MGM Resorts’ current perch would bring the stock to nearly $45 a share.
The shares of MGM often rise when they have displayed similar technical traits to the ones that the stock has today. Schaeffers also noted that MGM was oversold and could be poised to recover.
MGM Resorts shares are favored by analysts
MGM’s shares may have suffered this year, but analysts still love the stock. Seaport Research analyst Vitaly Umansky has rated MGM as a “buy”, with a price of $56.
He has a positive opinion about the gaming stocks Macau’s strength is expected to be higher than anticipated where he sees gross gaming revenue (GGR) posting a compound annual growth rate (CAGR) of 18% from 2023 through 2025. MGM, based in Las Vegas, owns 56% MGM China. MGM China operates two integrated resorts within the Special Administrative Region (SAR). Shaun Kelley, a Bank of America analyst, is bullish as well on MGM.
Kelley stated that “in Macau we expect MGM Resorts International to beat Wynn and MGM Resorts International by large amounts, driven primarily by shares gains.”
Kelley, an analyst at Kelley Research, believes MGM Las Vegas will report first quarter results in line with the estimates. This is a better result than Caesars Entertainment’s (NASDAQ:CZR), the rival company, who the analyst thinks may miss forecasts.
Analysts believe that encouraging trends in baccarat could help MGM Resorts, Wynn Resorts NASDAQ: WYNN to achieve better first quarter results.
MGM Resorts: Other catalysts
There are also other potential catalysts, though it’s not clear if these will materialize. These could include sales of lagging regional casinos in Massachusetts Ohio. Although the operator is not publicly confirming that the operating rights of those venues have been put on the market, it has not confirmed the availability.
MGM can create greater confidence in investors by continuing to buy back stock, decreasing debt and demonstrating that BetMGM has made progress compared with rivals like DraftKings or FanDuel.
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