Citi Initiates Coverage on MGM Mirage (MGM) with a Sell, Next Shoe to Drop - Defaults at CityCenter
MGM Hot Sheet
Rating Summary:16 Buy, 7 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23
Citi initiates coverage on MGM Mirage (NYSE: MGM) with a Sell with a price target $2.50, citing the default rates at CityCenter.
Citi analyst says, "20-30% default rate at CityCenter? — Completion of this mega-project could not come at a worse time for MGM. To date, 55% of condo units have been sold, with only 20% deposits being received. Considering estimated spot prices have fallen 33% since the pre-sales (peak), our base case is a 20-30% default rate. Our analysis shows if prices fell a further ~15-20% from current levels, the condo projects will be loss making (the Mandarin condos aside)."
MGM MIRAGE is a gaming company. It is engaged in the ownership and operation of casino resorts, which includes offering gaming, hotel, dining, entertainment, retail and other resort amenities.
Citi analyst says, "20-30% default rate at CityCenter? — Completion of this mega-project could not come at a worse time for MGM. To date, 55% of condo units have been sold, with only 20% deposits being received. Considering estimated spot prices have fallen 33% since the pre-sales (peak), our base case is a 20-30% default rate. Our analysis shows if prices fell a further ~15-20% from current levels, the condo projects will be loss making (the Mandarin condos aside)."
MGM MIRAGE is a gaming company. It is engaged in the ownership and operation of casino resorts, which includes offering gaming, hotel, dining, entertainment, retail and other resort amenities.
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