MGM Mirage (MGM) Looks Gloomy

According to a report released by Soleil Securities, MGM (NYSE: MGM) City Center is following an aggressive pricing policy and currently is offering discounted prices than its competitors. City Center’s ARIA and Vdara were priced at $188 and $175 respectively during the period of 12/17-1/17. The competitors Venetian and Wynn Encore were priced at $202 and $252 respectively during the same time period. Also Wynn was priced at $228 and Bellagio commanded a price tag of $215. This shows deep-discount on City Center’s property.

MGM is also expected to come up with $200 ADRs. Every $10 in ADR is expected to impact its EBITDA and EPS by $8 million and $0.01 respectively. Current consensus estimate for 2010 EBITDA stands at $1436 Million and EPS is expected to be $ -0.52. Further, keeping sluggish demands in view, Soliel Securities has maintained its ‘Hold’ recommendation with price target of $13.