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Brean Murray Carret & Co. Reiterates a 'Buy' on MGM Resorts (MGM); Operating Bump Temporary, Trends Turning Positive

May 4, 2012 1:28 PM EDT Send to a Friend
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Price: $24.63 --0%

Rating Summary:
    22 Buy, 8 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 5 | Down: 11 | New: 24
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Brean Murray Carret & Co. reiterates a 'Buy' on MGM Resorts (NYSE: MGM) price target lowered from $17 to $16.

Analyst, Ryan Worst, said, "We believe several items in 1Q including room remodels, low hold percentage, and weak convention calendar combined to limited operating leverage, leading to disappointing Strip EBITDA and margins. Management indicated that the lack of a major convention during March negatively impacted RevPAR by 3%, and we estimate that when combined with low hold percentage and the room remodels at MGM Grand EBITDA was negatively impacted by about $400 mln and margins by over 200bps."

Worst thinks that with gaming volumes increasing and convention mix picking up, and approval for a second casino in Macau could provide additional upside.

FY12 loss lowered from (0.49) to (0.58) and FY13 from (0.27) to (0.35)

For an analyst ratings summary and ratings history on MGM Resorts click here. For more ratings news on MGM Resorts click here.

Shares of MGM Resorts closed at $12.92 yesterday.




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