Please ensure Javascript is enabled for purposes of website accessibility

Why MGM Resorts Stock Jumped 7% Today

By Howard Smith - Updated Apr 5, 2021 at 10:55AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Recovery stocks, including casino operators, are gaining backers as the vaccination rollout continues.

What happened

Casino owner MGM Resorts International (MGM 0.72%) began the week on a positive note with an analyst upgrade based on the reopening gaining steam in Las Vegas. Investors reacted by pushing the stock up about 7%, as of 10:40 a.m. EDT. 

So what

As the vaccination rollout increases the number of people willing to travel, analysts are beginning to price the recovery into stock valuations. In a note to investors on Monday, Morgan Stanley analysts upgraded MGM stock to an overweight, or buy, rating. The firm also increased its target price to $45 per share, according to MarketBeat. MGM shares are currently trading at about $42. 

Park MGM at night in Las Vegas

Park MGM Las Vegas. Image source: MGM Resorts International.

Now what

Morgan Stanley analyst Thomas Allen told investors industry participants have been indicating strong bookings, and booking windows are moving further out. Allen also noted that Las Vegas locations are already busy. He added in the note to investors, "those customers illustrated demand for Vegas is there and are spending more per visitor than they have in the past." 

MGM isn't just relying on its casino locations in Las Vegas and Macao, however. It is growing its online gaming and sports betting business as well. The casino operator's BetMGM online wagering app launched in 2018 and has been steadily expanding into more U.S. states.

But the casino properties are still what move the needle for the company, and it was welcome news for investors that MGM resumed 24/7 hotel operations at Mandalay Bay, Park MGM, and The Mirage in Las Vegas on March 3.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

MGM Resorts International Stock Quote
MGM Resorts International
MGM
$36.41 (0.72%) $0.26
Morgan Stanley Stock Quote
Morgan Stanley
MS
$79.89 (-0.80%) $0.65

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
345%
 
S&P 500 Returns
119%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/16/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.