What happened
Shares of casino giant MGM Resorts (MGM -2.58%) jumped as much as 7.9% in trading on Monday after getting an analyst upgrade. At 2:45 p.m. EDT, shares were up 5.5%.
So what
Analyst David Katz at Jefferies upgraded shares of MGM to a buy rating and raised the price target from $36 to $50 per share. The reason for the upgrade was an improved economic outlook due to stimulus checks for Americans and the vaccine reaching everyone who wants it by summer.
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Another catalyst that will certainly help MGM's growth long term is the BetMGM app and the growing number of states where the service is available. In 2020, revenue on BetMGM was $178 million, and in 2021 growth is expected to be "well over 100%". If that's the kind of growth we can expect over the next few years, this could be a great growth stock in gambling.
Now what
There's an expectation that Las Vegas will be a booming area by summer as consumers and businesses start to spend on entertainment again. Based on management's comments about increased bookings in the second half of 2021 and the rising expectations for economic activity by economists across the board, this should be one of the bigger beneficiaries of the end of the pandemic. And that's what investors are pricing in today.
