{"id":143419,"date":"2020-07-31T09:49:48","date_gmt":"2020-07-31T16:49:48","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=143419"},"modified":"2020-07-31T13:41:07","modified_gmt":"2020-07-31T20:41:07","slug":"mgm-las-vegas-woes-overshadow-positives-amid-covid-19","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/mgm-las-vegas-woes-overshadow-positives-amid-covid-19\/","title":{"rendered":"MGM Recovery Going to Take Time, ‘Cleaner’ Gaming Ideas Available, Says Analyst"},"content":{"rendered":"

MGM Resorts International (NYSE:MGM) is faltering Friday, trading lower by nearly five percent a day after the company reported a second-quarter operating loss of $1 billion. The loss highlights Wall Street’s concerns regarding the recovery trajectory for Las Vegas.<\/p>\n

\"MGM
MGM CEO Bill Hornbuckle, seen here at a 2018 Las Vegas Stadium Authority meeting, faces challenges in Sin City. But one analyst says investors will like his leadership style compared to his predecessor. (Image: Las Vegas Review-Journal<\/em>)<\/figcaption><\/figure>\n

On a Thursday conference call with analysts and investors, MGM executives discussed strength in regional markets. But the reality is the company is the largest operator on the Strip — the gaming center analysts are most concerned with, as the coronavirus pandemic remains a headwind for the travel and leisure industry.<\/p>\n

In a note to clients today, Stifel analyst Steven Wieczynsk said<\/span>\u00a0that “the company\u2019s fortunes are directly tied to demand trends and sentiment along the Las Vegas Strip.”<\/span><\/p>\n

Since early June, the bulk of MGM’s Strip properties came back online, with the Mirage and Park MGM being the exceptions. On the conference call, CEO Bill Hornbuckle said those venues are taking reservations for Aug. 27, while refuting speculation<\/a> the Mirage is for sale.<\/span><\/p>\n

Wieczynski has a \u201chold\u201d rating on the stock, and he pared his price target on the name to $18 from $20.<\/span><\/strong><\/p>\n

Stripped Down\u00a0<\/span><\/h2>\n

Las Vegas is contending with at least two issues that make its road to recovery longer than, say, Macau or domestic regional gaming markets.<\/span><\/p>\n

First, business travel, which is vital for propping up weekday occupancy rates on the Strip, has ground to a halt because of the coronavirus pandemic. Second, data confirms many leisure travelers are reluctant<\/a> to return to Sin City until a COVID-19 vaccine is available. Analysts say July air travel bookings and hotel occupancy rates across the US are stagnating amid a second wave of coronavirus cases.<\/span><\/p>\n

\n

Although Las Vegas is challenged, MGM said all of its properties that are back online are cash flow positive since the reopening, with Mandalay Bay being the exception. With the operating environment far from normal, MGM is finding ways to lower costs.<\/span><\/strong><\/p>\n<\/div>\n

\u201cAdditionally, as with most of its domestic gaming peers, MGM continues to identify ways to remove costs from the business to enhance margins, even as the top-line remains impaired. MGM highlighted $450 million in annualized cost savings, the majority of which it expects to prove permanent as the business gradually comes back online,\u201d said Wieczynski.<\/span><\/p>\n

Positive Catalysts<\/span><\/h2>\n

MGM is not a lost cause, however, notes the Stifel analyst. He points to several factors in the company’s favor, including strength in the regional portfolio<\/a>, $8.1 billion in liquidity, and Hornbuckle, who Wieczynski believes will be well-received by the investment community relative to his predecessor, Jim Murren.<\/span><\/p>\n

However, catalysts such as margin enhancement, iGaming and sports betting, and Japan are longer ranging in nature, which could keep investors on the sidelines until Las Vegas shows credible signs of recovery.<\/span><\/strong><\/p>\n

\u201cWe believe there are cleaner ways to invest in themes across the broader gaming realm that do not require an investor to absorb the same level of risk related to the Strip\u2019s recovery trajectory,\u201d said Wieczynski.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

MGM Resorts International (NYSE:MGM) is faltering Friday, trading lower by nearly five percent a day after the company reported a second-quarter operating loss of $1 billion. The loss highlights Wall Street’s concerns regarding the recovery trajectory for Las Vegas. On a Thursday conference call with analysts and investors, MGM executives discussed strength in regional markets. […]<\/p>\n","protected":false},"author":46,"featured_media":143421,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[62,10],"tags":[],"acf":[],"yoast_head":"\nMGM Las Vegas Woes Overshadow Positives Amid COVID-19<\/title>\n<meta name=\"description\" content=\"MGM Resorts has some positives for investors to consider, but the time it takes Las Vegas to rebound overshadows those perks.\" \/>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"MGM Las Vegas Woes Overshadow Positives Amid COVID-19\" \/>\n<meta property=\"og:description\" content=\"MGM Resorts has some positives for investors to consider, but the time it takes Las Vegas to rebound overshadows those perks.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/mgm-las-vegas-woes-overshadow-positives-amid-covid-19\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2020-07-31T16:49:48+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-07-31T20:41:07+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/07\/BH.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/mgm-las-vegas-woes-overshadow-positives-amid-covid-19\/\",\"url\":\"https:\/\/www.casino.org\/news\/mgm-las-vegas-woes-overshadow-positives-amid-covid-19\/\",\"name\":\"MGM Las Vegas Woes Overshadow Positives Amid COVID-19\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/mgm-las-vegas-woes-overshadow-positives-amid-covid-19\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/mgm-las-vegas-woes-overshadow-positives-amid-covid-19\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/07\/BH.jpg\",\"datePublished\":\"2020-07-31T16:49:48+00:00\",\"dateModified\":\"2020-07-31T20:41:07+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"MGM Resorts has some positives for investors to consider, but the time it takes Las Vegas to rebound overshadows those perks.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/mgm-las-vegas-woes-overshadow-positives-amid-covid-19\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/mgm-las-vegas-woes-overshadow-positives-amid-covid-19\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/mgm-las-vegas-woes-overshadow-positives-amid-covid-19\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/07\/BH.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/07\/BH.jpg\",\"width\":1200,\"height\":800,\"caption\":\"MGM CEO Bill Hornbuckle, seen here at a 2018 Las Vegas Stadium Authority meeting, faces challenges in Sin City, but one analyst says investors will like his leadership style compared to his predecessor. 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