MGM Resorts, the Consumer Cyclical sector company, was revisited by a Wall Street analyst yesterday. Analyst Robin M. Farley from UBS maintained a Hold rating on the stock and has a $39.00 price target.
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Robin M. Farley has given his Hold rating due to a combination of factors related to MGM Resorts’ recent performance and future outlook. The third quarter in Las Vegas appears to be following a similar pattern to the second quarter, with underlying trends showing a potential decline in EBITDA. Although MGM’s Q2 decline was partly due to disruptions like room renovations and low hold, the underlying EBITDA trend was still negative, particularly in lower-end properties.
Looking ahead to the fourth quarter, expectations for convention business improvement have not materialized as anticipated. While the Formula One event in November is expected to perform consistently with the previous year, the overall convention mix is likely to remain similar to Q3. Additionally, even though room renovations at the Grand are expected to be completed by the end of October, there is little indication of significant improvement in underlying trends. These factors contribute to the cautious outlook reflected in the Hold rating.
M. Farley covers the Consumer Cyclical sector, focusing on stocks such as Las Vegas Sands, MGM Resorts, and Choice Hotels. According to TipRanks, M. Farley has an average return of 23.8% and a 68.79% success rate on recommended stocks.