Q4 Preview: MGM (MGM) Investors Hope Vegas Recovery Kicking In; Looking to Macau

MGM Resorts International (NYSE: MGM) is lower this afternoon, ahead of the company's fourth quarter 2010 earnings release, expected out before the market opens Monday, February 14, 2011. Shares are down 0.4%.

MGM is expected to report a loss of $0.22 per share on revs of $1.50 billion. Last quarter, the Las Vegas, NV-based gaming stock reported an adjusted loss of $0.21 per share on revs of $1.56 billion, beating out views. Looking back at Q409, MGM produced an adjusted loss of $0.25 per share with revs of $1.45 billion, versus the consensus loss of $0.13 per share on revs of $1.45 billion.

Shares gained 32% through the quarter, to $14.85 at the end of December. The stock is up 6.1% since then, and finished 2010 up 52.6%.

Data from Bloomberg has 9 analysts with a Buy on MGM, 15 with a hold, and three suggesting to Sell. The analyst price target average is $15.50, with a high of $20 and low of $5.50. Shares have traded in a range of $16.94 - $8.92 over the last 52-weeks.

Summary

• Goldman is a buyer of MGM. They see MGM as having the best turnaround upon a Las Vegas recovery, which they expect through 2011. Goldman is looking for Q410 revs of $1.51 billion from the company, just ahead of the consensus. EBITDA is expected to be $336 million compared to $256 million for the same period in Q409.
  
  They expect investors to focus in on City Center, which will record its first full year of operations this quarter. Other factors to consider are 2011 convention bookings/trends, and the timing of the Macau IPO.
  
  Goldman has a Buy rating on the shares, with a price target of $18.
  
  
• Hudson Securities isn't looking for a blockbuster quarter out of the company. EBITDA should be $304 million, according to Hudson. Las Vegas strip RevPAR should be essentially flat. They note that data points lead to an uneven recovery in Las Vegas. They note that overall asking rates in the MGM portfolio through the retail channel were down 6.7%.
  
  Hudson has a Sell on the share, with a $12 price target.

Taking a brief look at Las Vegas Sands (NYSE: LVS) numbers for their fourth quarter, we see a 16.5% increase in their Las Vegas revenues. Additionally, LVS saw a dip in average daily rate and RevPAR at both the Venetian and Palazzo. Adjusted property EBITDA increased 41.7%.

MGM Resorts is expected to release their Q410 earnings on Monday, February 14, 2011, at approximately 8:30am EST. Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results withi0 n seconds of their release.

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