Nomura Securities Trims PT on MGM Resorts (MGM), Keeps Buy
Nomura Securities trimmed its price target on MGM Resorts (NYSE: MGM) from $14 to $12 following Q3 results but maintained its Buy rating.
"As we have been flagging, H212 RevPAR will be mushy, but 2013 group bookings are up 10% and 2014 are up 20%," analyst Harry Curtis notes. "The Strip recovery is taking longer to ramp than we had expected. Our Buy rating is based on there being enough incremental demand in national group biz to lift pricing on the Strip over the next 12-18 months. Macau was, as expected, strong mass and slowing VIP growth. Our 2013 Macau EBITDA est. is now $714M, down from $722M. We expect to see ~$60M interest exp savings in 2013. MGM continues to chip away at the US debt. We reiterate our Buy rating because at ~$10/sh, we believe the risk/reward is still appealing longer term. If the ramp occurs faster than expected, there could be upside to 2013 estimate especially given MGM's high operating leverage, providing upside to our valuation."
FY12E EPS from ($0.53) to ($0.73); FY13E EPS from ($0.31) to ($0.86).
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 $10.31 yesterday, with a 52 week range of $8.83-$14.94.
"As we have been flagging, H212 RevPAR will be mushy, but 2013 group bookings are up 10% and 2014 are up 20%," analyst Harry Curtis notes. "The Strip recovery is taking longer to ramp than we had expected. Our Buy rating is based on there being enough incremental demand in national group biz to lift pricing on the Strip over the next 12-18 months. Macau was, as expected, strong mass and slowing VIP growth. Our 2013 Macau EBITDA est. is now $714M, down from $722M. We expect to see ~$60M interest exp savings in 2013. MGM continues to chip away at the US debt. We reiterate our Buy rating because at ~$10/sh, we believe the risk/reward is still appealing longer term. If the ramp occurs faster than expected, there could be upside to 2013 estimate especially given MGM's high operating leverage, providing upside to our valuation."
FY12E EPS from ($0.53) to ($0.73); FY13E EPS from ($0.31) to ($0.86).
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 $10.31 yesterday, with a 52 week range of $8.83-$14.94.