Is MGM Resorts International Stock Outperforming the S&P 500?

MGM Resorts International (MGM) is a global hospitality and entertainment company that operates several integrated casino, hotel, and gaming destinations across the U.S. and Macau. Its portfolio includes iconic Las Vegas Strip resorts, regional casinos and digital sports betting via BetMGM. The company is headquartered in Las Vegas, Nevada. The company has a market capitalization of $11.98 billion, which classifies the stock as “large-cap.”

MGM’s shares reached a 52-week high of $51.59 on June 1, but are down 9.2% from that level. Over the past three months, the stock has gained 28.8%. The broader S&P 500 Index ($SPX) is up by a 13.5% over the past three months. Therefore, MGM has been the clear outperformer over this period.

Based on rebounding demand in the Las Vegas region, the stock has gained over the past year. Over the past 52 weeks, the stock has gained 38%, while the S&P 500 index is up 25.4%. MGM’s stock is up 28.4% year-to-date (YTD), while the broader index is up 9.6%. The company’s shares have been trading above its 50-day moving average since late May, and above its 200-day moving average since February. 

Driven primarily by MGM China and MGM Digital, MGM reported a record 1Q consolidated net revenue. The company’s topline is $4.45 billion, reflecting a 4% year-over-year (YOY) increase. However, its adjusted EPS declined by 29% annually to $0.49.

MGM’s stock gained 16.1% intraday on June 1 after People Incorporated made a non-binding offer to buy all of the company’s outstanding shares it doesn't already hold, paying $48.30 per share in cash, as the proposed price is a premium over its 30-day volume-weighted average price. 

We compare MGM’s performance with that of another resort and casino operator, Wynn Resorts, Limited (WYNN), which is up 21.4% over the past 52 weeks but declined 12.3% YTD. Therefore, MGM has been the clear outperformer over these periods.

Wall Street analysts are moderately bullish on MGM’s stock. The stock has a consensus rating of “Moderate Buy” from the 22 analysts covering it. The mean price target of $46.68 is roughly flat compared to current levels. However, the Street-high price target of $59 indicates a 26% upside.