Published on 26 May 2023 on Zacks via Yahoo Finance

Factors That Underscore MGM Resorts' (MGM) Solid Prospects

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MGM Resorts International MGM is benefiting from increased business volume and travel activity, primarily at MGM China and Las Vegas Strip Resorts. Robust demand for sports betting is also driving growth. Consequently, the stock has gained 19.2% year to date compared with the industry’s increase of 18.7%.The Zacks Rank #1 (Strong Buy) company’s sales in 2023 are likely to witness growth of 15.4% year over year. In the past 60 days, earnings estimates for 2023 have witnessed upward revisions of 329.5%.Let’s delve deeper to check out the factors likely to spur MGM’s growth.

Growth Catalysts

The company is gaining from strong leisure demand, ease in travel restrictions and high contributions from the Las Vegas market. During first-quarter 2023, net revenues at Las Vegas Strip Resorts were $2,176.2 million, up 31% year over year. Increased business volume and travel activity, and the addition of The Cosmopolitan resulted in the upside.During first-quarter 2023, net revenues from regional operations totaled $945.8 million, up 6% from the prior-year quarter’s levels. The uptick was primarily driven by an increase in non-gaming business volume. MGM remains bullish on its domestic business outlook.Also, improving visitation in Macau bodes well for MGM Resorts. The government of China is considering measures to support Macau’s economy in all aspects. Favorable policies are likey to be introduced to improve visitation patterns, and boost tourism and traffic in the region.Moreover, constructive developments around the concession renewals are likely to have boosted the company’s confidence in the government's judicious and fair approach to the process. In first-quarter 2023, it witnessed high contributions from MGM China due to the removal of COVID-19-related travel restrictions.

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