MGM Resorts International (NYSE: MGM) has already returned nearly 30% since the start of the year but a Barclays analyst is convinced the rally is from done just yet.
Brandt Montour assumed coverage of the hospitality and entertainment company this morning with an “overweight” rating. His $59 price target suggests another 40% upside from here.
His bullish view on MGM stock is based primarily on continued strength in Las Vegas and recovery in Macau. In a note to client today, the analyst said:
We see MGM as a global leader in premium gaming, with an unmatched combination of market breadth and premium brand positioning across land and digital, with shareholder-friendly mgmt, and a very attractive yield.
Earlier this month, MGM reported market-beating results for its fiscal fourth quarter.
Strength in its balance sheet that allows it to potentially penetrate new markets and a dominant position in sports betting were among other reasons cited for the bullish call.
Barclay’s Brandt Montour is also convinced that the casino operator is well-positioned to weather an economic downturn.
MGM has attractive premium positioning in both Las Vegas and U.S. regionals, with any near to medium cooling off risk more than offset by upside from Macau’s ongoing recovery, though LA shows no signs of slowing.
He sees the company’s share repurchase plans as a reason to buy MGM stock as well. Last year, the Nevada-based company bought LeoVegas for $604 million to expand its digital footprint.
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