UPDATE: Nomura Downgrades MGM Resorts International to Neutral on Valuation, Risk/Reward

Nomura downgraded MGM Resorts International

from Buy to Neutral and raised the price target from $12.00 to $13.50. Nomura noted, "After a nearly 40% lift in MGM's stock since mid-Nov. vs. nearly a 10% increase for the S&P 500, we are lowering our rating to Neutral from Buy. Patient investors may see MGM in the high teens in 18-24 months, but we think the risk/reward is now in balance in the intermediate term. For the past 12 months, pricing power seen in 2011 in Las Vegas has stalled, and it is our view that it will take another 12+ months before the city's occupancy rises enough to lift ADR. With over 50% of groups on the books that were contracted in 2009-10 with modest escalators, stronger transient demand will be needed to drive 2013 pricing more than +2%-3%." MGM Resorts International closed at $12.89 on Wednesday.