MGM Resorts International MGM announced Tuesday that it will not submit a revised proposal for Entain, its BetMGM joint venture partner.
While this means MGM Resorts International’s ownership will remain at 50%, the company could pursue “further structuring solutions to gain more control,” according to BofA Securities.
The MGM Resorts International Analyst: Shaun Kelley resumed coverage of MGM Resorts International with an Underperform rating and raised the price target from $15 to $25.
The MGM Resorts International Thesis: The upward revision in the price target reflects “a faster core business recovery and sports betting and iGaming upside,” Kelley said in a Wednesday note.
Yet MGM Resorts International has a complex corporate structure, and its upside from the sports betting and iGaming opportunity is lower than that of its peers, the analyst said.
Kelly has a Buy rating on Penn National Gaming, Inc PENN and a Neutral rating on Draftkings Inc DKNG.
In a separate note, the analyst said: “DraftKings and FanDuel continue to maintain a dominant share position with around 65% to 75% combined share in key markets such as New Jersey, Pennsylvania and Indiana. Michigan will be an important test for this dominance as this Friday’s launch represents an 'even playing field' across competitors in online sports betting and iGaming.”
Related link: Michigan Enters Online Sports Betting Game, With Barstool And DraftKings Ready To Roll
MGM Price Action: Shares of MGM Resorts International ended Wednesday's session up 1.74% at $31.06.
The Bellagio and Aria. Photo courtesy of MGM Resorts International.
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