MCHVF - MGM Resorts dazzles analysts with revenue cash flow cycling higher

2023-05-02 10:01:02 ET

MGM Resorts International ( NYSE: MGM ) opened trading on Tuesday with a 2.26% swing lower despite posting a strong quarter with Las Vegas properties booming and Macau in recovery mode. The reaction to the MGM report on Wall Street has been very favorable.

Jefferies analyst David Katz pointed to strong execution by Buy-rated MGM Resorts ( MGM ) against the growth opportunities in Las Vegas, Macau and in digital. He said the resulting cash flow generation is driving outsized capital returns. "Although the capital structure provides risk, the upside potential going forward is far greater," he noted.

JPMorgan also gushed on the results from Overweight-rated MGM Resorts ( MGM ). Analyst Joseph Greff pointed to the strong results from Macau, the Las Vegas Strip and U.S. regionals. The firm pushed up estimates on MGM and took its price target to $60.

CBRE Equity Research John DeCree noted the Las Vegas Strip outperformed for MGM with adjusted property EBITDAR of $836M vs. $791M consensus and the Street high mark of $813M. He also said Macau is recovering faster than anticipated and MGM is compounding that with seemingly structural market share gains due in part to the 200 incremental tables added under the new concession. CBRE maintained its Buy rating and price target of $62, which represents an 8.6X multiple of the FY24 consolidated adjusted EBITDAR estimate. "With MGM shares currently trading at a bargain 7.1X our FY24 Consolidated Adjusted EBITDAR estimate, it is hard to stay on the sidelines here," he wrote.

Earlier in the day MGM China ( OTCPK:MCHVF ) issued its own earnings report. Revenue was up 131.2% year-on-year during the quarter to HK$4.8B and reached 84% of the pre-pandemic level seen in first quarter of 2019.

More on MGM Resorts:

• MGM Resorts: Solid Long-Term Growth Drivers Are Very Reassuring
• Check out the MGM earnings call transcript.
• View the growth metrics on MGM Resorts
• Read an update on the Macau revenue numbers for April
• Dig into the Seeking Alpha Quant Rating across the casino sector

For further details see: