Q4 Preview: Eyes Remain on MGM China Into Results (MGM)


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Shares of MGM Resorts International ( MGM ) are trading down roughly 2 percent Tuesday ahead of the release of its fourth-quarter results before the opening bell on February 22nd.

The Wall Street quarterly consensus for MGM Resorts is a loss of $0.19 per share in earnings on $2.17 billion in revenue. During the fourth quarter of last year, the company reported an earnings loss of $0.20 per share on $1.47 billion in total sales.

For the full year 2011, analysts on the Street are currently estimating a loss of $0.53 per share in earnings on $7.76 billion in total sales.

The fourth quarter conference call is scheduled for 11:00 am ET on February 22, 2012. Dial 1-877-355-2280 for domestic callers and 1-706-758-3659 for international callers. The conference call access code is 43802425.

According to data from Bloomberg, shares of MGM Resorts have 18 Buy ratings, eight Hold ratings and one Sell rating. The average price target on shares of MGM is $16 with a range from $11 to $19.

Analyst Comments:

  • Back on February 3rd Goldman Sachs downgraded its rating on the company from Buy to Neutral as the price of shares neared its $14.50 price target. The firm remains confident in the company's long-term outlook and potential. For the upcoming quarter, the Goldman forecasts a loss of $0.24 per share in earnings.

  • JPMorgan highlighted MGM China's board of directors meeting to discuss a possible dividend, which is anticipated to be in the range of $400-$500 million. MGM will receive 51 percent of the amount decided due to its ownership in the company. JPMorgan reaffirmed its Overweight rating on the company ahead of the release.

  • Ahead of the release, Brean Murray Carret & Co. has raised its estimates for the quarter due to continued stronger than expected trends on the Strip. For the quarter, the firm now forecasts earnings will total a loss of $0.19 per share, down from its previous forecast of a $0.22 per share loss. Brean Murray Carret said the company's Las Vegas properties should see a 20 percent growth on a year over year basis.

    The firm believes the recent financial changes and improving market trends indicate the company may have about $500 million in free cash flows in FY13.

    An analyst at Brean Murray Carret commented, "Although RevPAR gains will likely be weaker in 2012, MGM has the opportunity to generate increased growth in the gaming segment. We estimate MGM's Las Vegas gaming revenue was about flat year over year in 2011 due to abnormally low hold percentage despite Las Vegas Strip gaming revenue increasing 5 percent. We believe normalized hold percentages will drive an improved outlook for MGM in 2012."

    Brean Murray Carret increased its price target on the company from $15 to $17 and reiterated its Buy rating.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks

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