MGM is upgraded at Argus, which cites Nevada Gov. Sisolak’s decision to lift the occupancy cap for state casinos to 50% of capacity starting March 15.
MGM Resorts International (MGM) – Get Report shares rose on Tuesday after Argus analyst John Staszak raised his rating on Las Vegas’s biggest casino operator to buy from hold.
He has a price target of $42 on the stock.
Argus acted on Nevada Gov. Steve Sisolak’s decision to lift the occupancy cap for state casinos to 50% of capacity starting March 15, compared with 35% now and 25% before Feb. 15.
“We expect demand among leisure travelers to recover this summer and look for a rebound in the company’s convention business later in the year,” Staszak wrote in a commentary, according to Seeking Alpha.
“In addition, we note that capacity restrictions at the company’s regional properties have for the most part been eased, which should lead to stronger results in the first half of 2021.
“Management’s efforts to drive growth at BetMGM (the company’s sports betting and iGaming segment), along with recent improvement at MGM China, also bode well for future results.”
MGM shares recently traded at $39.16, up 4.4%, and have soared 83% over the past six months amid investor optimism about the prospects for sports gambling, COVID vaccines and economic recovery.
While the pandemic initially sent MGM’s stock reeling, it has now climbed 23% over the past year.
Morningstar analyst Dan Wasiolek thinks the move is overdone.
“No-moat MGM’s fourth-quarter results matched our expectation, as the recovery continues to be led by sports betting and regional casinos,” he wrote Feb. 10.
“Thus, we don’t plan a material change to our $28 fair value estimate and see [the] shares as slightly overvalued.”
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Originally published at https://www.thestreet.com/investing/mgm-upgraded-to-buy-at-argus-on-nevada-casino-occupancy on .
