Analyst lifts MGM Resorts rating, price target
NEW YORK (AP) — An analyst lifted his rating and price target for MGM Resorts International on Tuesday, in part because of the casino operator's improved balance sheet.
Joel Simkins of Credit Suisse said in a client note that MGM Resorts International has worked on lowering its borrowing costs and extending debt maturities.
The analyst said that MGM Resorts International is also well positioned if the middle-income customer recovers this year and starts to spend again on the Las Vegas Strip, as it has several properties such as Bellagio, Mandalay Bay and MGM Grand there.
Simkins also likes MGM Resorts International's presence in Macau, the only place in China where gambling is legal. The analyst said that MGM Resorts International will probably be able to continue to generate significant free cash flow from MGM China and can use this to help pay dividends to its parent company. Macau is also likely to be buoyed by limited supply growth through the middle of the decade, he added.
Simkins raised MGM Resorts International to "Outperform" from "Neutral" and boosted its price target to $17 from $11.
Shares of the company added 19 cents to $12.87 in midday trading.