Sterne Agee Raises PT on MGM (MGM) after Q4, Keeps Neutral as Strip Momentum Stalls

February 21, 2013 8:52 AM EST Send to a Friend
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Price: $20.33 +4.79%

Rating Summary:
    23 Buy, 7 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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Sterne Agee raised its price target onMGM Resorts (NYSE: MGM) from $12 to $13.50 following Q4 results but maintained a Neutral rating.

Analyst David Bain comments, "4Q12 in-line results a bit better than muted investor expectations, though 1Q13 guide calling for flat Rev/PAR uninspiring, in our view. What we like – 1) Signs of slot handle improvement (read-through for FIT Leisure customers, the crux of MGM); 2) continuing balance sheet improvements; 3) solid domestic and significant Cotai expansion opportunities; and 4) improved flow-through. However, we believe for shares to move significantly higher, more evidence for a true Strip recovery is needed."

The firm's CY13/CY14 EBITDA goes to $1.99b/$2.11b from $1.97b/$2.09b, reflecting lesser Rev/PAR assumptions on the Strip but stronger flow through assumptions. CY13/CY14 EPS goes to ($0.24)/($0.08) from ($0.53)/($0.22) mostly as a result of lower interest assumptions and an adjustments to other non-operating expenses.

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 $12.54 yesterday.


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