MGM Resorts Share Pullback on Near-Term Headwinds Offers Investment Opportunity; Shares Undervalued
We believe the 10% drop in no-moat MGM shares in response to first-quarter results was an overreaction to lowered 2018 guidance that in our view is driven by four largely temporary factors: Monte Carlo renovation disruption (2% of total sales), slower Mandalay image recovery (8.5%), a canceled fight, and weaker hold in April. Cumulatively, we view these headwinds lowering our 2018 EBITDA by around $100 million (a 3% cut) with no impact to forecasts in future years, something that does not justif...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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