MGM Resorts (MGM) PT Raised to $32 at Nomura
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Nomura Securities analyst Harry Curtis reiterated a Buy rating and boosted his price target on MGM Resorts (NYSE: MGM) to $32.00 (from $28.00), suggesting 22% upside from current levels. The analyst expects a stream of mostly positive catalysts
1) Continued pricing upside in Las Vegas. Most investors expect upside to 3Q16 guidance of 7% based on rate surveys that suggest at least 100bps outperformance. There is greater skepticism about 4Q though, because of MGM 's difficult RevPAR comp last year (11.9%). Our survey shows ~25% sequential pricing in Oct. and Nov. on transient rates, which should translate into RevPAR growth of at least 3.5%, with upside to 5%+. We have published a companion note on Las Vegas RevPAR this morning.
2) National Harbour, which opens in Dec., will be the region 's must see resort in the Mid-Atlantic,
3) RevPAR growth in Las Vegas in 1Q17 should be above trend because the Conagra convention cycles through Vegas, and
4) The opening of MGM Cotai in 2Q should lead to EBITDA growth in Macau for the first time since 4Q14.
Shares of MGM Resorts closed at $26.23 yesterday.
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