Please ensure Javascript is enabled for purposes of website accessibility

Could MGM Resorts Have a 26% Upside?

By Rhian Hunt - Apr 22, 2021 at 5:21PM

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

One analyst thinks so after taking in yesterday's investor presentation.

Following the investor day presentation that MGM Resorts International (MGM -2.70%) 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 -4.63%) into third place.

Five red dice on a silver laptop computer keyboard.

Image source: Getty Images.

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 0.57%), 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.

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
$29.54 (-2.70%) $0.82
Entain Stock Quote
$1,140.00 (0.57%) $6.50
DraftKings Inc. Stock Quote
DraftKings Inc.
$12.37 (-4.63%) $0.60

*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 analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/06/2022.

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.