MGM Moving Past Vegas Headwinds, But Into Macau Cyclical Risk; Shares Undervalued
While Vegas' (50% of revenue) temporary headwinds (event calendar and Park renovation) are subsiding as expected, Macau's (20% of revenue) cyclical risk is increasing, while MGM's Cotai property still experiences some ramp-up pains ahead of VIP club openings. As a result, we may adjust our $37.50 valuation down $0.50-$1 to account for Macau cyclical risk by pushing our existing 2020-21 modeled downturn forward into 2019. Additionally, we plan to adjust our MGM Cotai near-term forecast down sligh...MGM Resorts International is a holding company. Through its subsidiaries, the company owns and operates casino, hotel, and entertainment resorts across the United States and in Macau. The company's segments include: Las Vegas Strip Resorts, which consists of casino resorts such as Bellagio, MGM Grand Las Vegas, Mandalay Bay, The Mirage, Luxor, New York-New York, Excalibur, and Park MGM; Regional Operations, which consists of casino resorts such as MGM Grand Detroit, Beau Rivage, Gold Strike Tunica, Borgata, MGM National Harbor, MGM Springfield, Empire City, and MGM Northfield Park; and MGM China, which owns and operates casino resorts and the related gaming subconcession and land concessions.
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