Goldman Sachs Reiterates Buy Rating on MGM

Goldman Sachs, with news of the MGM Macau IPO, is reiterating its Buy rating on MGM Resorts International MGM and has maintained its price target of $18 on the stock. In the report, Goldman Sachs writes, “We are reiterating our Buy rating on MGM as a long-term leisure travel and Vegas recovery story. Yesterday, the company announced a transaction that appears to facilitate the announced MGM Macau IPO, which would give MGM controlling stake in MGM Macau and reduce regulatory overhang. The stock reacted favorably, but for momentum to be sustained, we believe the Vegas recovery needs to play out. We acknowledge that this turnaround story has made many twists and turns over the past 16 months since we raised our rating to Buy, but we still believe that MGM is one of the most leveraged ways to invest in an improving domestic economy that benefits from improving business and vacation travel. We are seeing a number of macro and micro indicators that suggest this is occurring, but acknowledge that any economic improvement is not likely to be a ‘straight line up and to the right.'” MGM closed yesterday at $13.70.