Mizuho Adjusts Price Target#
Mizuho has lowered its price target for MGM Resorts International from $62 to $59, while still maintaining an Outperform rating on the stock. Currently, MGM shares are trading at $39.54, close to their 52-week high of $40.46, and have seen an increase of over 20% in the past six months. Despite this positive trend, some data suggests that the stock may be slightly overvalued compared to its Fair Value.
Las Vegas Revenue Trends#
Mizuho pointed out that recent trends in Las Vegas revenue per available room (RevPAR) may be overlooked by investors. MGM's RevPAR saw a decline of 8% in the third quarter and 10% in the fourth quarter. However, market-wide data indicates improvements, with gains of 4.5% in January and 6.2% in February. Preliminary data for March suggests a possible increase of around 20% in RevPAR.
April Comparisons and Analyst Sentiment#
The firm noted that April's performance might appear weaker due to comparisons with Easter, rather than indicating a real decline in business. Mizuho acknowledged that this could put pressure on MGM shares in the short term, especially among investors looking for signs of recovery.
Mixed Analyst Views#
In related news, MGM Resorts' financial outlook has been under scrutiny. UBS has maintained a Neutral rating, citing rising costs in acquiring customers for online sports betting, which has particularly affected BetMGM. They have adjusted their price target for MGM to $39 from $40. Stifel has also revised its target down to $48 from $50, while keeping a Buy rating, after analyzing gaming revenue trends in Las Vegas and other markets. Despite these challenges, Stifel noted that traffic on the Las Vegas Strip remains strong. Meanwhile, Citizens maintains a positive outlook on MGM, viewing the competition from betting exchanges as limited.