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Here's Why You Should Add MGM Resorts (MGM) to Portfolio Now
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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 aiding the company. Consequently, the stock has gained 26.3% compared with the industry’s growth of 21.6%.
In the past 30 days, earnings estimates for current year have witnessed upward revisions of 1.6% to $1.92 per share. MGM’s 2023 sales are likely to witness growth of 16.2% year over year.
Let’s delve deeper into the factors likely to spur MGM’s growth.
Growth Drivers
During first-quarter 2023, MGM benefited from strong leisure demand, ease in travel restrictions and high contributions from the Las Vegas market. During the quarter, net revenues at Las Vegas Strip Resorts were $2,176.2 million, up 31% year over year.
MGM Resorts benefited from increased business volume and travel activity on a year-over-year basis. Also, the addition of The Cosmopolitan was another positive.
During the quarter under review, net revenues from MGM’s regional operations totaled $945.8 million, up 6% from the prior-year quarter’s levels. The upside was primarily driven by an increase in non-gaming business volume. It remains bullish on its domestic business outlook.
The company is benefiting from robust demand for sports betting. BetMGM continues to gain market share. It also announced a partnership with Carnival cruises to provide onboard ship betting and gaming under the BetMGM brand.
Image Source: Zacks Investment Research
In the first quarter of 2023, it launched BetMGM Ohio and Massachusetts, bringing its total active markets to 26. Given the positive momentum in markets coupled with its unique and unparalleled online and offline offerings, management remains optimistic about long-term growth with revenue expectations of $1.8-$2 billion in 2023. MGM expects to achieve positive EBITDA in the second half of 2023.
On the other hand, Marriott International, Inc. (MAR - Free Report) recently announced a strategic licensing agreement with MGM Resorts to offer reciprocal earning and redemption benefits to Marriott Bonvoy and MGM Rewards loyalty program members. This partnership facilitates the development of MGM Collection with Marriott Bonvoy. Earlier both the companies had collaborated for a franchise agreement concerning Cosmopolitan Hotel (in Las Vegas) and reported strong performance with respect to the same.
MGM derives a solid share of its revenues from Macau, the largest gaming destination in the world. It is undertaking initiatives to increase revenues and junket productivity in Macau. Management anticipates a positive trend, buoyed by upgrades to main gaming floor products and marketing initiatives. Going forward, the company remains optimistic about MGM China’s prospects backed by strength in premium mass.
Zacks Rank
MGM currently sports a Zacks Rank #1 (Strong Buy).
The Zacks Consensus Estimate for Trip.com Group’s 2023 sales and earnings per share (EPS) suggests improvements of 101.6% and 531%, respectively, from the year-ago period’s levels.
OneSpaWorld Holdings Limited (OSW - Free Report) carries a Zacks Rank #2 (Buy). OSW has a trailing four-quarter earnings surprise of 65.8%, on average. Shares of OSW have surged 72.3% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates rises of 33.9% and 89.3%, respectively, from the year-ago period’s levels.
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Here's Why You Should Add MGM Resorts (MGM) to Portfolio Now
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 aiding the company. Consequently, the stock has gained 26.3% compared with the industry’s growth of 21.6%.
In the past 30 days, earnings estimates for current year have witnessed upward revisions of 1.6% to $1.92 per share. MGM’s 2023 sales are likely to witness growth of 16.2% year over year.
Let’s delve deeper into the factors likely to spur MGM’s growth.
Growth Drivers
During first-quarter 2023, MGM benefited from strong leisure demand, ease in travel restrictions and high contributions from the Las Vegas market. During the quarter, net revenues at Las Vegas Strip Resorts were $2,176.2 million, up 31% year over year.
MGM Resorts benefited from increased business volume and travel activity on a year-over-year basis. Also, the addition of The Cosmopolitan was another positive.
During the quarter under review, net revenues from MGM’s regional operations totaled $945.8 million, up 6% from the prior-year quarter’s levels. The upside was primarily driven by an increase in non-gaming business volume. It remains bullish on its domestic business outlook.
The company is benefiting from robust demand for sports betting. BetMGM continues to gain market share. It also announced a partnership with Carnival cruises to provide onboard ship betting and gaming under the BetMGM brand.
Image Source: Zacks Investment Research
In the first quarter of 2023, it launched BetMGM Ohio and Massachusetts, bringing its total active markets to 26. Given the positive momentum in markets coupled with its unique and unparalleled online and offline offerings, management remains optimistic about long-term growth with revenue expectations of $1.8-$2 billion in 2023. MGM expects to achieve positive EBITDA in the second half of 2023.
On the other hand, Marriott International, Inc. (MAR - Free Report) recently announced a strategic licensing agreement with MGM Resorts to offer reciprocal earning and redemption benefits to Marriott Bonvoy and MGM Rewards loyalty program members. This partnership facilitates the development of MGM Collection with Marriott Bonvoy. Earlier both the companies had collaborated for a franchise agreement concerning Cosmopolitan Hotel (in Las Vegas) and reported strong performance with respect to the same.
MGM derives a solid share of its revenues from Macau, the largest gaming destination in the world. It is undertaking initiatives to increase revenues and junket productivity in Macau. Management anticipates a positive trend, buoyed by upgrades to main gaming floor products and marketing initiatives. Going forward, the company remains optimistic about MGM China’s prospects backed by strength in premium mass.
Zacks Rank
MGM currently sports a Zacks Rank #1 (Strong Buy).
Other Key Picks
Some other top-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
Trip.com Group Limited (TCOM - Free Report) flaunts a Zacks Rank #1. TCOM has a trailing four-quarter earnings surprise of 147.9%, on average. Shares of TCOM have increased 41.1% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Trip.com Group’s 2023 sales and earnings per share (EPS) suggests improvements of 101.6% and 531%, respectively, from the year-ago period’s levels.
OneSpaWorld Holdings Limited (OSW - Free Report) carries a Zacks Rank #2 (Buy). OSW has a trailing four-quarter earnings surprise of 65.8%, on average. Shares of OSW have surged 72.3% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates rises of 33.9% and 89.3%, respectively, from the year-ago period’s levels.