TLDR
- MGM shares advanced 2.32% to reach $36.68 on Wednesday, marking back-to-back daily gains
- Fourth quarter earnings per share hit $1.60, surpassing analyst projections of $0.64 by $0.96
- Quarterly revenue reached $4.61B, exceeding the $4.42B consensus estimate
- IAC Inc. acquired approximately 1.1 million shares at $36.30 per share, totaling ~$39.9M
- TD Asset Management expanded its holdings by 146.9%, adding 55,300 shares during Q3
Shares of MGM Resorts International enjoyed a strong Wednesday session, advancing 2.32% to settle at $36.68. This represented the second consecutive trading day of positive momentum for the casino operator.
MGM Resorts International, MGM
The upward movement occurred during a generally favorable session for broader equity markets. The S&P 500 index climbed 0.78% while the Dow Jones Industrial Average gained 0.49%.
Despite Wednesday’s gains, MGM remains 8.67% off its 52-week peak of $40.16, which was established on August 28th. The stock’s 52-week floor stands at $25.30.
Wednesday’s session saw 4.4 million shares change hands, approximately 343,636 below the 50-day average trading volume of 4.8 million.
Compared to industry competitors, results varied. DraftKings posted the strongest performance with a 4.01% advance. Caesars Entertainment climbed 2.16%, and Las Vegas Sands edged up 0.66%.
Earnings Beat
MGM’s latest quarterly financial results, published on February 4th, demonstrated impressive performance metrics throughout.
The gaming and hospitality company delivered earnings per share of $1.60 for the period, significantly exceeding the analyst consensus estimate of $0.64 by $0.96. This marked a substantial improvement from the $0.45 EPS recorded in the comparable quarter one year prior.
Quarterly revenue totaled $4.61 billion, surpassing Wall Street’s expectation of $4.42 billion.
The company achieved a return on equity of 26.04% alongside a net margin of 1.17%. Current analyst projections call for full-year earnings per share of $2.21.
Institutional and Insider Activity
On the institutional investment front, multiple major funds have expanded their MGM positions in recent reporting periods.
Helikon Investments dramatically increased its stake by 379.9% during Q2, elevating its total holdings to 8.81 million shares valued at approximately $303 million.
Davis Selected Advisers expanded its position by 14.4%, bringing its total to 23.82 million shares worth $819 million. Arrowstreet Capital increased its stake by 119.6%, reaching 4.21 million shares.
Norges Bank established a fresh position valued at approximately $60.6 million. Goldentree Asset Management increased holdings by 20.7%, elevating its total to 5.4 million shares with a value of $185.8 million.
TD Asset Management significantly increased its position by 146.9% during Q3, purchasing an additional 55,300 shares to reach a total of 92,957 shares, valued at $3.22 million based on the most recent filing.
Institutional investors collectively control 68.11% of MGM’s outstanding shares.
Regarding insider transactions, major stockholder IAC Inc. purchased 1,098,748 shares on December 5th at an average cost of $36.30 per share, representing a total investment of approximately $39.9 million. IAC’s total position now stands at 65.8 million shares, valued at roughly $2.39 billion. Corporate insiders collectively own 3.06% of outstanding shares.
Wall Street analyst opinion remains divided. The consensus recommendation sits at “Hold” with an average price objective of $41.94.
Susquehanna reduced its price target from $46 to $45 while maintaining a “positive” outlook. JPMorgan elevated its target from $39 to $41 alongside a “neutral” rating. Barclays established a $37 price target. UBS maintains a “neutral” stance with a $37 objective. Goldman Sachs continues with a “sell” rating and $33 target.
Among 20 analysts providing coverage, one assigns MGM a Strong Buy rating, eight recommend Buy, seven suggest Hold, and four advise Sell.
MGM currently trades at a price-to-earnings ratio of 48.89, sporting a market capitalization of $9.38 billion and a beta coefficient of 1.38. The stock’s 50-day moving average sits at $35.41 while its 200-day moving average stands at $34.96.
