Las Vegas-based MGM Resorts International (MGM) is a global leader in hospitality and entertainment. With a market cap of $10.9 billion, MGM Resorts delivers exceptional guest experiences worldwide, offering an extensive portfolio of iconic resorts, world-class entertainment, and gaming facilities.
Shares of MGM Resorts have significantly underperformed the broader market over the past year. The stock has gained marginally over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 35.7%. In 2024, MGM stock is down 15%, while the SPX is up 25.5% on a YTD basis.
Narrowing the focus, MGM’s underperformance is also apparent compared to the Consumer Discretionary Select Sector SPDR Fund (XLY). The exchange-traded fund has gained 34.7% over the past year. Moreover, the ETF’s 22.1% gains on a YTD basis compares to the stock’s double-digit loss over the same time frame.
MGM stock dropped 11.7% after the company posted weaker-than-expected Q3 earnings results on Oct. 30. Casino revenue and EBITDA both fell short of Wall Street projections, with adjusted EPS declining 15.6% year-over-year to $0.54, also missing consensus estimates of $0.66. While total revenue rose 5.3% annually to $4.18 billion, it came in below the anticipated $4.22 billion. Notably, adjusted EBITDA amounted to $548.2 million, significantly missing analyst expectations of $1.16 billion.
For the current fiscal year, ending in December, analysts expect MGM Resorts’ EPS to decline 6.4% to $2.50 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing on one other occasion.
Among the 18 analysts covering MGM stock, the consensus rating is a “Strong Buy.” That’s based on 15 “Strong Buy” ratings and three “Holds.”
This configuration has been almost consistent over the past month.
Recently, Brandt Montour from Barclays maintained a “Buy” rating on MGM with a price target of $50, implying a potential upside of 31.6% from current levels.
The mean price target of $50.84 represents a 33.9% premium to MGM’s current price levels. The Street-high price target of $56 suggests an upside potential of 47.4%.
More news from BarchartOn the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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