Nomura Securities Maintains a 'Buy' on MGM Resorts (MGM); Lowering 2012 Strip Estimates

May 4, 2012 11:45 AM EDT
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Price: $22.77 -0.65%

Rating Summary:
    26 Buy, 5 Hold, 0 Sell

Rating Trend: = Flat

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Nomura Securities maintains a 'Buy' on MGM Resorts (NYSE: MGM) price target of $16.00.

Analyst, Harry Curtis, said, "Our long-term thesis of Strip RevPAR recovery is intact, where we continue to look for ~6% YoY RevPAR growth in 2012. In addition, we believe convention rates are also up mid-single digits. However, we are lowering our Strip margin estimate given 1Q’s flow thru (we estimate below 50%), and our F12 EBITDA margin goes from 24.3% to 23.2%. We expect strong trends in Macau to continue and approval of its Cotai land application in the next 6 months. We maintain our Buy rating and $16 PT. Rolling forward our valuation onto our 2013 estimates imply a $20 PT."

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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