Market Overview

MGM Resorts International Could Take 4-6 Years To Recover, BofA Says In Downgrade

MGM Resorts International Could Take 4-6 Years To Recover, BofA Says In Downgrade

MGM Resorts International’s (NYSE: MGM) core revenue growth was anemic even before the coronavirus outbreak, and a recovery has now become even more challenging, according to BofA Securities.

The MGM Resorts Analyst

Shaun Kelley downgraded MGM Resorts International from Neutral to Underperform and raised the price target from $14 to $15.

The MGM Resorts Thesis

The Las Vegas market faces a long recovery ahead due to effects of the COVID-19 pandemic, with restrictions on air travel and low demand for conventions and large-scale entertainment, Kelley said in the Wednesday downgrade note. (See his track record here.)

Businesses on the Strip have low pricing power that is worsened by relatively high fixed costs and their overreliance on online travel agencies, the analyst said. 

Las Vegas is highly dependent on long-distance travel, with 33% of visitors in 2019 coming from Eastern, Southern and Midwestern states and 20% from international markets, he said.

Kelley expects leisure travel to recover faster than corporate travel.

MGM Resorts International has high exposure to business travel, estimated at up to 30%.

The company’s revenue growth had been meager between 2007 and 2019, with declines in both gaming and hotel revenue.

It could take MGM Resorts International four to six years to return to 2019 levels, according to BofA. 

MGM Price Action

Shares of MGM Resorts International were down 3.88% at $15.85 at the time of publication.

Related Links

A Peek Into The Markets: US Stock Futures Down Ahead Of Earnings, Jobless Claims Data

10 Biggest Price Target Changes For Thursday

Latest Ratings for MGM

May 2020UBSMaintainsNeutral
May 2020Credit SuisseAssumesNeutral
May 2020B of A SecuritiesDowngradesNeutralUnderperform

View More Analyst Ratings for MGM
View the Latest Analyst Ratings


Related Articles (MGM)

View Comments and Join the Discussion!

Posted-In: BofA Securities casinos Coronavirus Covid-19Analyst Color Downgrades Price Target Analyst Ratings Best of Benzinga

Latest Ratings

SOLOAegis CapitalAssumes4.0
TSLAJP MorganMaintains295.0
PFSICredit SuisseMaintains46.0
PMTCredit SuisseMaintains22.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at