Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 6 Nov, 24 | MGM | Buy | USD 36.23 | USD 40.9 | USD 44.0 | 99 days | 21.4% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
MGM Resorts International, through its subsidiaries, owns and operates casino, hotel, and entertainment resorts in the United States and internationally. The company operates through three segments: Las Vegas Strip Resorts, Regional Operations, and MGM China. Its casino resorts offer gaming, hotel, convention, dining, entertainment, retail, and other resort amenities. The company's casino operations include slots and table games, as well as online sports betting and iGaming through BetMGM. Its customers include premium gaming customers; leisure and wholesale travel customers; business travelers; and group customers, including conventions, trade associations, and small meetings. The company was formerly known as MGM MIRAGE and changed its name to MGM Resorts International in June 2010. MGM Resorts International was incorporated in 1986 and is based in Las Vegas, Nevada.
Improved Bottom Line: Net Margin of 5.8% in Q3 FY24 vs 5.3% in Q3 FY23
Increasing Shareholders' Wealth: ROE of 5.7% in Q3 FY24 vs 3.8% in Q3 FY23
Balance Sheet Risk: Debt-Equity of 2.24x in Q3 FY24 vs Industry Median of 0.44x
Higher Cash Cycle: 16.3 Days in Q3 FY24 vs 9.7 Days in Q3 FY23
Cybersecurity Threats, Uncertain Legal and Tax Environment, Reliance on Las Vegas as a Core Destination, Exposure to Liability from Gaming Operations, Integration of Acquisitions, Execution Risks in Large-Scale Developments, Changing Tourism Trends, etc.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 36.23 | 29.8 | 40.9 | 44.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Technical Observation (on the daily chart):
MGM's stock price appears to be finding support close to key trendline levels, indicating the possibility of a short-term rebound. The 14-day Relative Strength Index (RSI) is approaching oversold territory, suggesting a potential pullback could be on the horizon. Additionally, MGM's current trading price is situated below its ascending 21-day and 50-day Simple Moving Averages (SMAs), indicating there may be a likelihood of the stock retracing to these moving averages in the near future to address existing fair value gaps.
As per the above-mentioned technical indicators analysis, recent key business and financial updates, and momentum in the stock over the last month, a ‘Buy’ rating has been given to MGM Resorts International (NYSE: MGM) at its close price of USD 36.23 as of Nov 5, 2024.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Consumer Cyclical Industry: Resorts & Casinos
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| MGM MGM Resorts International |
0.15 0.51% | 29.79 | 11.77 | 12.80 | 0.57 | 3.03 | 2.25 | 15.53 |
| LVS Las Vegas Sands Corp |
0.24 0.62% | 38.87 | 56.23 | 16.29 | 4.18 | 7.87 | 5.21 | 15.33 |
| GXYEF Galaxy Entertainment Group Ltd |
- -% | 4.03 | 135.79 | 14.12 | 1.15 | 2.73 | 1.07 | 7.83 |
| GXYYY Galaxy Entertainment Group Ltd ADR |
-0.01 0.05% | 19.59 | 670.00 | 14.04 | 1.15 | 2.71 | 1.08 | 7.93 |
| SCHYY Sands China Ltd ADR |
0.22 1.10% | 20.30 | - | 12.08 | 6.70 | 211.73 | 8.69 | 51.08 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is November 05, 2024. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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