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MGM Resorts International

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A tough operating environment in Macau weighed on MGM Resorts’ revenues since Jun 2014 to the most part of 2016. Though revival of gaming revenues in Macau is a huge positive, still it will take some time for the company to fully capitalize on it. In the second quarter, revenues at MGM China fell 1% due to lower revenues from main-floor table games. In fact, MGM Resorts’ shares have underperformed the industry year to date. Estimates too have been going down ahead of its third quarter earnings release. However, strong portfolio and focus on non-gaming activities could offset the headwinds to some extent. Moreover, the company’s properties in Las Vegas should continue to cash in on the favorable trends of improving employment rate and positive tourism numbers in the region. Also, it has mostly positive record of earnings surprises in recent quarters. Yet, heightened competition and increased debt pressure are concerns.

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