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On Thursday, Citi analysts, led by George Choi, increased their price target on MGM Resorts International (NYSE:MGM) shares to $52 from the previous $50, while sustaining a Buy rating for the stock. Currently trading at $31.46, InvestingPro analysis suggests MGM is undervalued, with analysts maintaining a strong buy consensus (1.52 out of 5.0). The adjustment reflects the firm’s confidence in the company’s strong performance and strategic initiatives.
MGM’s management has conveyed optimism regarding the sustained demand from premium customers and valuable partnerships, such as the one with Marriott, which they believe compensates for the slower international business, noting a slight decline in Canadian revenue. The company’s financial health score of 2.72 (rated as GOOD by InvestingPro) and robust gross profit margin of 45.5% support this positive outlook. These factors, along with effective operational strategies, are contributing to what is anticipated to be a record-setting month for MGM’s Las Vegas Strip hotels in April 2025.
In addition to current successes, MGM Resorts is working towards a significant enhancement of its EBITDA, targeting over $150 million by 2025. Building on its current EBITDA of $2.49 billion, this improvement is expected to be driven by a combination of 35% revenue actions and 65% from cost-saving measures.
Looking further ahead, the company has also increased its investment commitment to the Osaka project, which is expected to open in 2030. The equity commitment now stands at approximately JPY 428 billion, translating to an estimated $600-700 million annually from 2025 to 2028. Despite the substantial investment, MGM anticipates a high-teen return from the project.
Furthermore, MGM Resorts is on schedule to submit its proposal for a new development in New York in June 2025. This move is part of the company’s broader expansion strategy.
The revision of the price target to $52 is a response to MGM’s stronger-than-expected performance in the first quarter of 2025 and its promising operational trends, as noted by Citi’s analysts in their commentary. With analyst targets ranging from $35 to $60, investors seeking deeper insights can access the comprehensive Pro Research Report and additional ProTips through InvestingPro, which offers extensive analysis of MGM’s financial health and growth potential.
In other recent news, MGM Resorts International reported its Q1 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $0.69, compared to the forecast of $0.49. However, the company’s revenue slightly missed projections, coming in at $4.28 billion against an expected $4.29 billion. BetMGM, MGM’s digital gaming arm, contributed significantly to this performance with a 34% increase in net revenue and a $150 million improvement in EBITDA. Analysts have noted MGM’s strategic expansions, particularly in Japan, where the company has made progress with construction plans. The company’s stock received a positive response following the earnings announcement, reflecting investor confidence. Analyst firms have not issued new upgrades or downgrades, but the company’s future outlook remains optimistic. MGM’s expansion into new digital platforms and international markets, such as Brazil, is also noteworthy. These developments highlight MGM’s ongoing efforts to strengthen its market position and financial performance.
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