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© Reuters. MGM Resorts (MGM) anticipated to see ‘relative outperformance’ in 2023
By Sam Boughedda
MGM Resorts (NYSE:) has been upgraded to Purchase from Maintain, with its value goal lifted to $50 from $40 per share by Truist analysts on Monday.
Jonas instructed buyers in a analysis observe that whereas the agency has traditionally been extra cautious on bear-case macro dangers to the strip and vacation spot markets, they anticipate MGM to “see relative outperformance in 2023” on the strip’s “sturdy occasion calendar and returning midweek enterprise journey.”
“Whereas the macro presents some uncertainty into 2023 (much like 2022), the occasion calendar might drive relative outperformance. CES (straightforward comps), Con/Agg (happens as soon as each 3 years), and the inaugural F1 ought to drive room charge compression (many days are already bought out) and sizable gaming/different non-gaming spend. We estimate these three giant occasions alone might alone drive ~$70M of Y/Y EBITDA upside in 2023,” wrote the analysts.
They added that Truist’s leisure-based room survey exhibits sturdy year-over-year progress in This autumn, with MGM charges up +42%/+27%/+66% for complete/weekends/weekdays. Moreover, preliminary January and February charges are up +38% and +31%, respectively.
“MGM could possibly be higher positioned in 2023 vs. 2008. In the course of the Nice Recession, Las Vegas skilled idiosyncratic circumstances (incl. new provide, unfavorable White Home messaging), which we do not see as we speak. We see macro headwinds offset by a stable occasion calendar, return of the midweek traveler, and a extra diversified market/points of interest,” the analysts continued.
MGM shares jumped 3% in early Monday buying and selling.
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