Following the investor day presentation that MGM Resorts International (MGM 1.53%) made yesterday, gambling industry investment bank and analysis firm Union Gaming issued a bullish research note and price-target boost today. Union believes MGM has a potential upside of approximately 26%, setting a $52 price target, as compared to the company's current share price of $41.14.
Union's analyst John DeCree said MGM Resorts "has compiled all of the pieces of the puzzle, including a veteran management team, a multi-dimensional customer acquisition funnel, scalable proprietary technology, vast market access, and a global brand to throw it all behind." The upbeat rating comes after MGM predicted it would achieve second place in sports betting and online betting with its BetMGM platform, pushing high-profile fantasy sports and sportsbook operator DraftKings, Inc. (DKNG +1.26%) into third place.
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MGM Resorts' investor day presentation provided a rosy picture of what the casino and resort company claims the future has to offer with its digital-gambling platform. The company claims the existing market presence of MGM Resorts, plus the fact its partner on the BetMGM joint venture, Entain plc (ENT +1.87%), is sharing in the operations, will help to keep the cost of running the business advantageously low. It also says BetMGM is operating in a $32 billion addressable market.
The investor presentation went on to state that BetMGM is already operating in 12 states, and it expects to be operational in 20 states within the next 12 months. If it proves correct, this will represent access to approximately 40% of the adult U.S. population by April 2022. MGM says it also expects its brick-and-mortar casinos to help drive more traffic to its sports betting and online-gambling platform.
