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Factors That Underscore MGM Resorts' (MGM) Solid Prospects
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MGM Resorts International (MGM - Free Report) is benefiting from increased business volume and travel activity, primarily at MGM China and Las Vegas Strip Resorts. Robust demand for sports betting is also driving growth. Consequently, the stock has gained 19.2% year to date compared with the industry’s increase of 18.7%.
The Zacks Rank #1 (Strong Buy) company’s sales in 2023 are likely to witness growth of 15.4% year over year. In the past 60 days, earnings estimates for 2023 have witnessed upward revisions of 329.5%.
Let’s delve deeper to check out the factors likely to spur MGM’s growth.
Growth Catalysts
The company is gaining from strong leisure demand, ease in travel restrictions and high contributions from the Las Vegas market. During first-quarter 2023, net revenues at Las Vegas Strip Resorts were $2,176.2 million, up 31% year over year. Increased business volume and travel activity, and the addition of The Cosmopolitan resulted in the upside.
During first-quarter 2023, net revenues from regional operations totaled $945.8 million, up 6% from the prior-year quarter’s levels. The uptick was primarily driven by an increase in non-gaming business volume. MGM remains bullish on its domestic business outlook.
Also, improving visitation in Macau bodes well for MGM Resorts. The government of China is considering measures to support Macau’s economy in all aspects. Favorable policies are likey to be introduced to improve visitation patterns, and boost tourism and traffic in the region.
Moreover, constructive developments around the concession renewals are likely to have boosted the company’s confidence in the government's judicious and fair approach to the process. In first-quarter 2023, it witnessed high contributions from MGM China due to the removal of COVID-19-related travel restrictions.
Image Source: Zacks Investment Research
Sports betting and iGaming continue to be major growth drivers. MGM Resorts is focusing on sports betting expansion. BetMGM, which is live in 26 markets, is driving growth. On the back of positive momentum in markets, and its unique and unparalleled online as well as offline offerings, MGM remains optimistic about long-term growth with BetMGM revenue expectations of $1.8-$2 billion in 2023.
Management expects to achieve positive EBITDA in the second half of 2023. It is confident on account of improved design and functionality of the BetMGM app launch (of a single wallet) and omnichannel growth prospects.
Meanwhile, to drive growth, the company continues to invest in additional markets. MGM Resorts and Entain anticipate investing approximately $150 million in 2023. MGM Resorts’ BetMGM announced that it has partnered with Gila River Hotels & Casinos and Arizona Cardinals in an effort to expand its retail and online sports betting.
Management stated collaboration with Orix to build a world-class integratedGM resort in Japan. BetMGM has a long-term growth target of 20-25% in U.S. sports betting and iGaming. Currently, MGM is on track to achieve its target.
Other Key Picks
Some other top-ranked stocks in the Zacks Consumer Discretionary sector are Royal Caribbean Cruises (RCL - Free Report) , Bluegreen Vacations Holding Corporation and Crocs, Inc. (CROX - Free Report) . While RCL and BVH flaunt a Zacks Rank #1, CROX carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Royal Caribbean Cruises has a trailing four-quarter earnings surprise of 28.1%, on average. The stock has gained 36.7% in the past year.
The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates rises of 20.4% and 42.9%, respectively, from the year-ago period’s levels.
Bluegreen Vacations has a trailing four-quarter earnings surprise of 24.7%, on average. The stock has increased 24.2% in the past year.
The Zacks Consensus Estimate for BVH’s 2023 sales and EPS indicates gains of 3.6% and 17.6%, respectively, from the year-ago levels.
Crocs has a trailing four-quarter earnings surprise of 19.6%, on average. The stock has surged 100.2% in the past year.
The Zacks Consensus Estimate for CROX’s 2023 sales and EPS indicates improvements of 13.2% and 5.7%, respectively, from the year-ago period’s levels.
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Factors That Underscore MGM Resorts' (MGM) Solid Prospects
MGM Resorts International (MGM - Free Report) is benefiting from increased business volume and travel activity, primarily at MGM China and Las Vegas Strip Resorts. Robust demand for sports betting is also driving growth. Consequently, the stock has gained 19.2% year to date compared with the industry’s increase of 18.7%.
The Zacks Rank #1 (Strong Buy) company’s sales in 2023 are likely to witness growth of 15.4% year over year. In the past 60 days, earnings estimates for 2023 have witnessed upward revisions of 329.5%.
Let’s delve deeper to check out the factors likely to spur MGM’s growth.
Growth Catalysts
The company is gaining from strong leisure demand, ease in travel restrictions and high contributions from the Las Vegas market. During first-quarter 2023, net revenues at Las Vegas Strip Resorts were $2,176.2 million, up 31% year over year. Increased business volume and travel activity, and the addition of The Cosmopolitan resulted in the upside.
During first-quarter 2023, net revenues from regional operations totaled $945.8 million, up 6% from the prior-year quarter’s levels. The uptick was primarily driven by an increase in non-gaming business volume. MGM remains bullish on its domestic business outlook.
Also, improving visitation in Macau bodes well for MGM Resorts. The government of China is considering measures to support Macau’s economy in all aspects. Favorable policies are likey to be introduced to improve visitation patterns, and boost tourism and traffic in the region.
Moreover, constructive developments around the concession renewals are likely to have boosted the company’s confidence in the government's judicious and fair approach to the process. In first-quarter 2023, it witnessed high contributions from MGM China due to the removal of COVID-19-related travel restrictions.
Image Source: Zacks Investment Research
Sports betting and iGaming continue to be major growth drivers. MGM Resorts is focusing on sports betting expansion. BetMGM, which is live in 26 markets, is driving growth. On the back of positive momentum in markets, and its unique and unparalleled online as well as offline offerings, MGM remains optimistic about long-term growth with BetMGM revenue expectations of $1.8-$2 billion in 2023.
Management expects to achieve positive EBITDA in the second half of 2023. It is confident on account of improved design and functionality of the BetMGM app launch (of a single wallet) and omnichannel growth prospects.
Meanwhile, to drive growth, the company continues to invest in additional markets. MGM Resorts and Entain anticipate investing approximately $150 million in 2023. MGM Resorts’ BetMGM announced that it has partnered with Gila River Hotels & Casinos and Arizona Cardinals in an effort to expand its retail and online sports betting.
Management stated collaboration with Orix to build a world-class integratedGM resort in Japan. BetMGM has a long-term growth target of 20-25% in U.S. sports betting and iGaming. Currently, MGM is on track to achieve its target.
Other Key Picks
Some other top-ranked stocks in the Zacks Consumer Discretionary sector are Royal Caribbean Cruises (RCL - Free Report) , Bluegreen Vacations Holding Corporation and Crocs, Inc. (CROX - Free Report) . While RCL and BVH flaunt a Zacks Rank #1, CROX carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Royal Caribbean Cruises has a trailing four-quarter earnings surprise of 28.1%, on average. The stock has gained 36.7% in the past year.
The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates rises of 20.4% and 42.9%, respectively, from the year-ago period’s levels.
Bluegreen Vacations has a trailing four-quarter earnings surprise of 24.7%, on average. The stock has increased 24.2% in the past year.
The Zacks Consensus Estimate for BVH’s 2023 sales and EPS indicates gains of 3.6% and 17.6%, respectively, from the year-ago levels.
Crocs has a trailing four-quarter earnings surprise of 19.6%, on average. The stock has surged 100.2% in the past year.
The Zacks Consensus Estimate for CROX’s 2023 sales and EPS indicates improvements of 13.2% and 5.7%, respectively, from the year-ago period’s levels.