Nomura Securities reiterates a 'Buy' on MGM Mirage (MGM); Top High-Beta Pick for 2012; Upside of 45% Despite Using Lower Multiple
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Price: $43.64 -1.04%
Rating Summary:
23 Buy, 15 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 20
Rating Summary:
23 Buy, 15 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 20
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Nomura Securities reiterates a 'Buy' on MGM Mirage (NYSE: MGM) price target lowered from $20 to $16.
Nomura analyst, Harry Curtis, said, "MGM entered 2011 at ~$15 and closed at ~$10. During the next 12-18 months, we expect the inverse, as we believe that the stock will rebound toward $16, or upside of 45% from last night’s close..."
"The primary catalyst for 2012 should be continued recovery in room pricing and out-of-room spend in Las Vegas, which we estimate lifts margin by 300bp and EBITDA to ~$1.3bn from $1.04bn in 2011E. We believe that room rate and overall revenue will increase ~7%, with more than 60% of the increase flowing through to EBITDA. In the last year, global multiples have compressed 10-20%, which we reflect in our revised target price. We now use a Las Vegas multiple of 8x (vs. 9x) and a Macau multiple of 10x (vs. 13x)."
For an analyst ratings summary and ratings history on MGM Mirage click here. For more ratings news on MGM Mirage click here.
Shares of MGM Mirage closed at $11.04 yesterday.
Nomura analyst, Harry Curtis, said, "MGM entered 2011 at ~$15 and closed at ~$10. During the next 12-18 months, we expect the inverse, as we believe that the stock will rebound toward $16, or upside of 45% from last night’s close..."
"The primary catalyst for 2012 should be continued recovery in room pricing and out-of-room spend in Las Vegas, which we estimate lifts margin by 300bp and EBITDA to ~$1.3bn from $1.04bn in 2011E. We believe that room rate and overall revenue will increase ~7%, with more than 60% of the increase flowing through to EBITDA. In the last year, global multiples have compressed 10-20%, which we reflect in our revised target price. We now use a Las Vegas multiple of 8x (vs. 9x) and a Macau multiple of 10x (vs. 13x)."
For an analyst ratings summary and ratings history on MGM Mirage click here. For more ratings news on MGM Mirage click here.
Shares of MGM Mirage closed at $11.04 yesterday.
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