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MGM Resorts (MGM) Announces MGM 2020 Plan to Drive Growth

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In an effort to drive growth, MGM Resorts International (MGM - Free Report) has announced “MGM 2020” plan. The plan will not only focus on cost-saving initiatives but also on improving efficiencies. This is a business-optimization plan, which will help the company to drive growth through investment in technology.

The company also implemented a similar plan in 2015, which was very successful. MGM Resorts has shown impressive growth since the announcement of its Profit Growth Plan in 2015.

The company expects annualized adjusted EBITDA of $300 million, which consists of $200 million by the end of 2020 and another $100 million by the end of 2021. MGM Resorts stated that $200 million of annualized cost savings will be driven by labor savings, sourcing and revenue optimization.

The company has informed that it is generating significant free cash flow. It aims to invest in technological advancements, which will boost revenues and increase market share. Technological advancement will drive the guest experience through pricing and digital as well as loyalty capabilities.

MGM Resorts, one of the leading companies in the gaming and lodging industry, is well poised to grow on high brand awareness. The company’s superior business model, extensive non-gaming revenue opportunities, high-quality assets and attractive property locations are the primary growth drivers. In the past few years, the company has taken various initiatives to align every recognized brand into one global entertainment brand. This resulted in a disciplined business model, with a unified view of strategy.

This Zacks Rank #3 (Hold) company has lost 12.3% in the past six months compared with the industry’s 27.7% decline.

Stocks to Consider

Some better-ranked stocks in the same space are Churchill Downs Incorporated (CHDN - Free Report) , Eldorado Resorts, Inc. (ERI - Free Report) and Full House Resorts, Inc. (FLL - Free Report) . Churchill Downs currently sports a Zacks Rank #1 (Strong Buy), whereas Eldorado Resorts and Full House Resorts carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Churchill Downs reported better-than-expected earnings in the trailing three quarters.

Eldorado Resorts has an impressive long-term earnings growth rate of 20%.

Full House Resorts’ earnings are expected to grow by 131.6% in the next year.

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