MGM: What's Wall Street Saying Now?

MGM Resorts International MGM reported Q1 financial results Monday, beating expectations but missing sales estimates.

Revenue came in at $2.33 billion with adjusted EPS of $0.26. The Estimize consensus was for EPS of $0.14 on revenue of $2.46 billion.

The stock fell following the earnings release and later recovered some of its losses to close at $21.27, down 0.51 percent. At Tuesday’s open, the stock traded at $21.19, down 0.38 percent.

Wall Street firms commented on the company following its earnings release. Below are highlights along with current ratings and price targets.

Credit Suisse - Outperform, $25 price target

“While there remains considerable uncertainty in Macau, we like MGM's leverage to Las Vegas recovery even with disappointing results in 1Q15. We have always taken a view that the Strip recovery was a gradual process; however, we believe key investments coming on stream in 2015/2016 best position the company versus peers leading to market share growth.”

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Brean Capital - Buy, $27 price target

“MGM China remains under pressure due to the government’s anti-corruption crackdown. Net revenue at MGM China outperformed the market, decreasing 33.1% y/y to $630.1MM versus total market GGR declining 36.6% in 1Q15. VIP table win dropped 45%, due to a 51% decline in VIP turnover, despite VIP win percentage increasing to 3.3% in 1Q15 from 3.0% in 1Q14.”

Stifel - Buy, $27 price target

“Beyond the mall monetization, management also confirmed its own team of advisors continues to look for opportunities to maximize the value of MGM’s real estate portfolio, including the potential conversion into a REIT. Although we do not expect to see anything overly disruptive on this front, we do find it encouraging management is actively looking for ways to enhance shareholder value and improve the quality of its own balance sheet.”

Susquehanna - Positive, $25 price target

“We are lowering our estimates, primarily to reflect a reduction in our Macau market forecasts and the 1Q miss, but we continue to believe MGM’s robust development pipeline, combined with its Vegas convention expansion and ROI projects, will prove to be sustainable growth drivers over the next several years.”

Deutsche Bank - Buy, $25 price target

“While the 1Q15 was disappointing from a margin perspective, we believe the weakest quarter of the year on the Strip is in the books and we are buyers of fundamental acceleration from here. Furthermore, while we find 2Q15 RevPAR guidance to be conservative, and hence we expect upside to the guide, we believe flow through will be closely monitored and do not expect MGM to get further passes this year on negative margin trends in the domestic operations.”