MGM Resorts (MGM) PT Raised to $34 at Morgan Stanley as Management is Set for Offense

February 18, 2021 7:38 AM EST
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Price: $39.75 -1.27%

Rating Summary:
    17 Buy, 15 Hold, 4 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 18 | Down: 20 | New: 68
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Morgan Stanley analyst Thomas Allen raised the price target on MGM Resorts (NYSE: MGM) to $34.00 (from $31.00) after 4Q AFFO/share of $0.57 was roughly in line with the consensus $0.59, driven by contractually fixed rent of $207m that was previously disclosed with MGM's earnings. G&A excl stock-based compensation was in line with our model at $3m, while net interest expense was slightly higher at $64m vs. expectations for $62m.

The analyst maintained an Equalweight rating, stating "On the earnings call, mgmt highlighted that discussions are "active", and that it wants to "position...for offense". MGP has built up nearly $2B of liquidity that it may use to pursue deals that are "large" and "complex". Management has no clear preference for Vegas vs. Regional assets and is hopeful it will announce a deal this year. Pro rata net leverage increased to 5.3x from 4.6x last quarter due to MGM's recent OP unit redemption, and is now near the midpoint of its target 5-5.5x range."

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