HSBC Analysts Initiate Coverage of MGM Resorts International
October 26, 2023
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HSBC Analysts recently initiated coverage of MGM ($NYSE:MGM) Resorts International with a “Buy” rating. MGM Resorts International is a world-leading entertainment company that owns and operates iconic properties such as Bellagio, MGM Grand, Mandalay Bay, and The Mirage in the U.S. and resorts in Macau, China. The company also offers integrated casino, hotel, entertainment, and retail experiences to its customers.
Additionally, MGM Resorts provides online gaming products through its subsidiary, BetMGM. This joint venture resulted in the formation of the integrated resort company, JREI. MGM Resorts is well-positioned for growth as it has a strong market presence in the U.S., a focus on international expansion, and a commitment to innovation. The company’s stock price has surged over the past year as investors have become more confident about the company’s future prospects due to its strong performance in areas such as sports betting and online gaming. HSBC Analysts have recommended buying MGM Resorts’ stock as the company has a bright future ahead due to its geographic diversification, technology investments, and market presence.
Price History
The stock opened at $36.9 and closed at $36.7, representing a slight increase of 0.1% from the previous closing price of 36.6. This marks the first investment bank rating for MGM Resorts International, which is one of the world’s leading entertainment companies. The company owns and operates several properties across the United States, as well as casinos in Macau, China and several other countries. It is also involved in the hospitality, gaming, entertainment and retail industries.
The analysts said the company’s presence across a range of business lines provides it with an opportunity to benefit from new trends. They added that MGM’s strong brands and its well-diversified portfolio makes it an attractive investment option for investors. The HSBC analysts are optimistic about MGM’s long-term prospects and believe the stock has potential for significant upside. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for MGM. More…
| Total Revenues | Net Income | Net Margin |
| 14.82k | 365.69 | -3.4% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for MGM. More…
| Operations | Investing | Financing |
| 2.1k | -167.52 | -3.81k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for MGM. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 42.91k | 38.06k | 12.52 |
Key Ratios Snapshot
Some of the financial key ratios for MGM are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 17.9% | -24.9% | 1.4% |
| FCF Margin | ROE | ROA |
| 8.0% | 2.9% | 0.3% |
Analysis
GoodWhale conducted an analysis of MGM RESORTS INTERNATIONAL’s financials and the results indicate that it has an intermediate health score of 6/10 with regard to its cashflows and debt, meaning it is likely to safely ride out any crisis without the risk of bankruptcy. The Star Chart also showed that MGM RESORTS INTERNATIONAL is strong in asset, dividend, growth, and profitability. Based on this, we classified the company as a ‘cheetah’, i.e. one that achieved high revenue or earnings growth but is considered less stable due to lower profitability. This type of company may be interesting to investors who are looking for higher returns driven by stock appreciation potential but are willing to take on more risk. The potential for higher returns comes from the company’s strong growth profile. On the other hand, investors should be aware that MGM RESORTS INTERNATIONAL may be less stable due to its lower profitability, and so caution should be exercised when investing in such companies. More…
Peers
MGM Resorts International is one of the world’s leading global hospitality companies, operating a portfolio of destination resort brands including Bellagio, MGM Grand, Mandalay Bay, The Mirage, and more. The company’s competitors include SkyCity Entertainment Group Ltd, Wyndham Hotels & Resorts Inc, and Cruzani Inc.
– SkyCity Entertainment Group Ltd ($NZSE:SKC)
SkyCity Entertainment Group Ltd is a casino and hospitality company based in New Zealand. The company has a market cap of 2B as of 2022 and a Return on Equity of 3.48%. SkyCity operates four casinos in New Zealand, two in Australia, and one in Chile. The company also has a number of hotels, restaurants, and bars.
– Wyndham Hotels & Resorts Inc ($NYSE:WH)
Wyndham Hotels & Resorts, Inc. is one of the largest hotel companies in the world, with over 9,000 hotels across more than 80 countries. The company offers a variety of hotel brands, including Wyndham, Ramada, Days Inn, Super 8, and Howard Johnson. Wyndham Hotels & Resorts is headquartered in Parsippany, New Jersey. The company’s market cap is 6.2B as of 2022 and its ROE is 30.65%.
Summary
HSBC recently initiated coverage on MGM Resorts International with a “Buy” rating. The analysts predict that the company’s share price will increase in the future and that MGM’s strong position in the Las Vegas gaming industry, its established presence in Macau, and its growing presence in international markets will be positive drivers of growth. The analysts also note that MGM is well positioned to capitalize on the recovery of leisure travel post-pandemic, along with other potential growth opportunities such as online gaming and sports betting. Overall, the analysts are optimistic about MGM’s future prospects and believe shareholders will benefit from the company’s strong performance.
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