How Will MGM Resorts Perform In Q1?

-0.06%
Downside
47.21
Market
47.18
Trefis
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MGM
MGM Resorts

MGM Resorts (NASDAQ: MGM) is expected to publish its Q1 2018 results on April 26, reporting on what is likely to be another mixed quarter for the company. Over Q4 2017, the company’s Las Vegas revenues grew by about 5% year-over-year, and the company expects to see some pressure in this region in Q1, largely due to a tough comparison. However, strong showings for CES and the Super Bowl should boost domestic revenue. In addition, the Chinese New Year should further increase its Macau business. Further, higher labor costs, expenses related to technological initiatives, and the transformation of the Monte Carlo casino should likely impact company’s margins and earnings in the first quarter. Below, we take a look at what to expect when the company reports earnings.

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We have a $40 price estimate for MGM Resorts, which is higher than the current market price. The charts have been made using our new, interactive platform. You can click here to modify the different driver assumptions, and gauge their impact on the earnings and price per share metrics.

For 2018, MGM remains optimistic about the demand both in the domestic and Macau market. MGM looks to further strengthen its position in the domestic market with two new launches – MGM Springfield in the third quarter and Park MGM and NoMad by the end of the year. We expect the domestic market to remain the driving force led by the improved outlook of the U.S. economy, recovery in the Vegas market – owing to recent tax cuts and higher customer spending – and its expansion into Massachusetts. In addition, we also expect a strong growth opportunity for MGM in Macau, driven by the tailwinds in the Macau casino market. MGM’s CEO is optimistic about the legalization of sports gambling as well, and we expect this to boost its domestic operations.

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