On May 22, 2014, we issued an updated research report on
MGM Resorts International
On Apr 29, the leading casino resort company reported solid
first-quarter results with earnings and revenues beating the Zacks
Consensus Estimate. Adjusted earnings of 21 cents per share for the
quarter compared favorably with the prior-year quarter figure of a
penny. The better-than-expected bottom-line performance, especially
in MGM China, led to the higher top line.
Total revenue increased 12% year over year, thanks to the good
performance by its China and CityCenter businesses. Though Casino
revenues at wholly owned domestic resorts declined 2%, MGM China's
net revenue was up 26.0% year over year due to increases in main
floor table games and VIP revenues.
The company's properties are well diversified in the U.S., which
protects it from regional downturns. Going forward, limited supply,
a moderate increase in visits in the Las Vegas market and improving
trends at its urban complex - CityCenter - should bode well for
domestic growth. MGM Resorts expects its Las Vegas business to grow
further in 2014, gaining from solid convention bookings and
completion of several capital initiatives on the Las Vegas Strip.
We believe the company stands to gain market share with the gradual
Apart from the domestic market, the company is progressing well
overseas too. MGM Resorts derives a solid share of its revenues
from Macau, the largest gaming destination in the world. Despite
concerns over a slowdown in China, the company expects the Macau
market to continue to grow as a result of the growing Asian middle
class population and infrastructure improvements, which are
expected to facilitate more convenient travel to and within Macau.
The company also expects a positive trend in Macau buoyed by
upgrades to main gaming floor products, marketing initiatives as
well as substantial growth in Macau mass market gaming revenues.
MGM Resorts plans to double its presence in Macau with the launch
of MGM Cotai project in 2016 in Cotai Strip, Macau.
On the international front, Japan and South Korea have also caught
the attention of the company. Driven by solid results, estimates
for 2014 and 2015 largely moved up over the last 30 days for this
Zacks Rank #2 (Buy) company.
Other Stocks to Consider
Investors interested in the gaming industry may consider stocks
Caesars Acquisition Co.
Wynn Resorts Ltd.
Multimedia Games Holding Company, Inc.
). While Caesars Acquisition sports a Zacks Rank #1 (Strong Buy),
Multimedia Games and Wynn Resorts carry a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
CEASERS ACQ-A (CACQ): Get Free Report
MULTIMEDIA GAME (MGAM): Free Stock Analysis
MGM RESORTS INT (MGM): Free Stock Analysis
WYNN RESRTS LTD (WYNN): Free Stock Analysis
To read this article on Zacks.com click here.