Mizuho lifts MGM stock price target to $60 from $56

On Thursday, Mizuho (NYSE:MFG) Securities updated its financial outlook for MGM Resorts International (NYSE:MGM), raising the price target to $60 from the previous $56 while maintaining an Outperform rating on the stock. Currently trading at $34.37, MGM’s stock sits well below the analyst consensus range of $37.50-$56.00. According to InvestingPro analysis, the stock appears slightly overvalued at current levels, though analysts maintain a bullish outlook with a strong consensus recommendation of 1.61 (where 1 is Strong Buy). The firm’s analysts believe that MGM Resorts has the potential to grow year-over-year (YoY) or at least come very close to it, despite the high expectations set by the company’s own projections.

The analysis by Mizuho includes a detailed breakdown of the expected earnings before interest, taxes, depreciation, and amortization (EBITDA) for the year 2024, which totals $3.106 billion. This projection represents potential growth from the current EBITDA of $2.56 billion. InvestingPro data shows MGM maintains a GOOD overall financial health score of 2.78, with particularly strong marks in growth and relative value metrics. This figure accounts for several specific deductions and additions, such as a $65 million impact from the Super Bowl, a $65 million cost related to the MGM Grand remodel, and a $37 million expense due to business interruption. On the positive side, Mizuho anticipates that MGM Resorts will achieve approximately $80 million in cost savings, assuming that 80% of the targeted $150 million cost goal is realized, with 75% of these savings occurring in Las Vegas.

The firm also noted that player volumes appear to be strong, and there is an expectation of positive hotel rate growth into 2025. This forecast includes mid-single-digit (MSD) increases excluding the Super Bowl impact in the first half of the year. Mizuho’s analysts assume a 3% core growth, net of the moving parts mentioned above. The conclusion drawn by Mizuho is that, net-net, they expect MGM Resorts’ performance to be flat YoY.

MGM Resorts International’s stock price adjustment reflects the confidence Mizuho has in the company’s ability to navigate through various cost factors and still achieve stable financial performance. The firm’s analysis suggests that MGM Resorts is well-positioned to maintain its growth trajectory despite some significant one-time expenses and ongoing investments. Supporting this view, InvestingPro data reveals impressive revenue growth of 12.31% and an attractive P/E ratio of 11.98. For deeper insights into MGM’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers, which includes detailed analysis of the company’s financial health, growth potential, and market position.

In other recent news, MGM Resorts International has been the focus of several analyst firms. Truist Securities maintained a positive stance on MGM Resorts, reiterating a Buy rating with a $50.00 price target, citing strong results from regional operations and its Macau segment. Stifel analysts also demonstrated confidence in MGM Resorts, adjusting the company’s price target upward to $50 from $47, highlighting a strong performance in January and strategies for expansion in Las Vegas.

Citi analyst George Choi increased the price target for MGM Resorts shares to $50.00, up from the previous $48.00, while reiterating a Buy rating. Choi’s report highlighted the company’s recent operating trends and management’s positive outlook. JMP Securities maintained a positive outlook on MGM Resorts, reaffirming a Market Outperform rating and a $50.00 price target, noting a significant year-over-year increase in EBITDAR, particularly in regional markets.

Barclays (LON:BARC) analyst Brandt Montour updated MGM Resorts’ financial outlook, increasing the price target from $45.00 to $47.00 while maintaining an Overweight rating. This change follows MGM Resorts’ performance that surpassed expectations across all its reportable segments. These are recent developments that highlight the strong performance and positive outlook of MGM Resorts International according to several analyst firms.

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