JPMorgan Upgrades MGM Resorts to Overweight Amid Positive Outlook
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Source: seekingalpha
- Rating Upgrade: JPMorgan upgraded MGM Resorts (MGM) from Neutral to Overweight, driven by growing confidence that Las Vegas EBITDAR estimates have bottomed, with expectations for improvement in the coming months due to easier comparisons and resilient U.S. leisure traveler trends.
- Demand Support Factors: Analysts noted that while inflation and high fuel prices require monitoring, approximately 50% of Las Vegas Strip traffic comes from drive-in customers, which should support demand, positioning MGM as one of the few undervalued gaming stocks with upward estimate potential.
- Future Outlook: Analysts expressed increased comfort with the Las Vegas supply-demand setup ahead of the high-profile Hard Rock opening in Q4 2027, which is expected to further energize the market and enhance MGM's competitive position.
- Financial Health: MGM boasts an implied free cash flow yield of around 14%, minimal estimate risk, an 11% short interest position, and strong valuation support from factors such as the Caesars (CZR) deal, share repurchases, and IAC, reinforcing its financial stability.
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Analyst Views on MGM
Wall Street analysts forecast MGM stock price to fall
14 Analyst Rating
5 Buy
7 Hold
2 Sell
Hold
Current: 42.930
Low
29.00
Averages
40.31
High
56.00
Current: 42.930
Low
29.00
Averages
40.31
High
56.00
About MGM
MGM Resorts International is a global gaming and entertainment company with national and international destinations featuring hotels and casinos, meetings and conference spaces, incredible live and theatrical entertainment experiences, and a range of restaurants, nightlife and retail offerings. Its segment includes Las Vegas Strip Resorts, Regional Operations, MGM China, and MGM Digital. Las Vegas Strip Resorts consists of casino resorts: Aria, Bellagio, The Cosmopolitan of Las Vegas, MGM Grand Las Vegas, Mandalay Bay, Luxor, New York-New York, Excalibur, and Park MGM. Regional Operations consists of various casino properties: MGM Grand Detroit in Detroit, Michigan; Beau Rivage in Biloxi, Mississippi; Gold Strike Tunica in Tunica, Borgata in Atlantic City, New Jersey; MGM National Harbor in Prince George’s County, Maryland; MGM Springfield in Springfield, Massachusetts; Empire City in Yonkers, New York, and others. MGM Digital is its online gaming portfolio which consists of LeoVegas.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Statewide Performance: Nevada's gaming win increased 5.3% year-over-year in April to $1.30 billion, despite a slight 0.6% dip in downtown casino revenues, showcasing overall strong performance across the state.
- Segment Analysis: The slot machine segment saw a 4.1% increase in gaming win, while table and card games rose 8.3%, with baccarat gaming win surging 20%, reflecting changing consumer preferences and market vitality.
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- Stable Tourism Data: As of April 2026, Las Vegas welcomed approximately 9.7 million tourists, roughly in line with last year's trends, indicating that despite concerns over rising fuel prices, tourist traffic remains strong, thereby boosting MGM's business growth.
- Market Absorption Capacity: JPMorgan's analysis suggests that the impact of new casino openings in Las Vegas is typically neutral to slightly positive, with historical data showing that market-wide visits increase by an average of 6% following a major new property opening, alongside room revenue and gross gaming revenue growth of 11% and 8%, respectively.
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- Decline in Mortgage Applications: US MBA mortgage applications fell by 8.5% for the week ending May 22, with the purchase mortgage sub-index down 0.4% and the refinancing sub-index plunging 18.1%, indicating the suppressive effect of high interest rates on the housing market.
- Corporate Earnings Overview: As of now, 83% of the 475 S&P 500 companies that reported Q1 earnings have exceeded expectations, with overall earnings projected to rise by 12% year-on-year, but excluding the tech sector, the growth is only 3%, highlighting disparities across industries.
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