fbpx
QQQ
+ 4.33
336.68
+ 1.27%
DIA
-2.13
342.89
-0.63%
SPY
-0.15
422.26
-0.04%
TLT
+ 2.11
138.82
+ 1.5%
GLD
-5.16
176.27
-3.02%

MGM Analysts React After Casino Operator Posts Q4 Sales Beat

February 14, 2019 3:29 pm
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More

Shares of MGM Resorts International (NYSE:MGM) are falling despite reporting a fourth-quarter sales beat on Wednesday.

The casino operator reported fourth quarter adjusted earnings of 11 cents per share, falling in-line with consensus estimates. Sales came in at $3.053 billion, beating estimates by $83 million.

The Analysts

Morgan Stanley's Thomas Allen maintained an Overweight rating on MGM with a $34 price target. 

Credit Suisse's Cameron McKnight maintained a Neutral rating with a $30 price target. 

The Thesis 

The Q4 results were ahead of expectations and were driven by stronger Vegas, regional and Macau perfromance, Allen said in a Thursday note. 

“MGM’s 4Q results and 2019 commentary give us increased confidence that Vegas is in better shape than perceived following negative estimate revisions in ‘17 and 1H18," the analyst said. 

Morgan Stanley is increasingly confident that MGM is well-positioned to win a gaming license in Osaka, Japan.

Credit Suisse analyst Cameron McKnight was slightly less bullish on the company and said he prefers Caesars Entertainment Corporation (NASDAQ:CZR).

“Management is no longer providing forward guidance, but sounded cautious on the 1Q and 1H, given cost inflation, reduced Chinese visitation and a more uncertain leisure customer,” the analyst said. 

“That said, the outlook for convention attendance is strong, non-gaming revenue growth should remain sold and MGM noted full year Vegas estimates ‘seem reasonable,'" McKnight said.

The Price Action

MGM shares were down 6.84 percent at $27.23 at the time of publication Thursday. 

Related Links: 

Casinos Among The Hardest-Hit Businesses During Economic Downturns

Analyst Still Optimistic On Casino Stocks, Upgrades Boyd Gaming

For the latest in financial news, exclusive stories, memes follow Benzinga on Twitter, Facebook & Instagram. For the best interviews, stock market talk & videos, subscribe to our YouTube channel.


Related Articles

MGM Resorts, Caesars Entertainment Stocks Upgrade: What You Need To Know

The Las Vegas gaming market seems to be delivering a faster- and stronger-than-expected recovery, with “especially positive booking trends," according to Morgan Stanley. read more

Caesars Entertainment Gets Downgrade On Valuation, Short-Term Risks

Caesars Entertainment Inc (NASDAQ: CZR) shares are up 109% over the last six months, which has led to a downgrade on valuation and some risks ahead. read more

Morgan Stanley Says Sports Betting Expectations Are Too High, Downgrades DraftKings And Penn National

After impressive 2020 share gains by the sports betting stocks, Morgan Stanley is downgrading shares of Draftkings Inc (NASDAQ: DKNG) and Penn National Gaming, Inc. (NASDAQ: PENN). read more

Atlantic City Casino Wins Up in January, Bolstered by Internet Sports Bet Handle