Shares of MGM Resorts International rallied 2.7% in afternoon trading Tuesday, after J.P. Morgan analyst Joseph Greff turned bullish on the casino operator, citing valuation and increasing momentum as its U.S. casinos. Greff raised his rating to overweight, after being at neutral for the past year, and lifted his stock price target to $47 from $45. The upgrade comes after the stock dropped 8.2% from the 13-year closing high of $42.20 on April 27 through Monday. Greff said the recent pullback has provided investors and opportunity to buy “with fundamentals continuing to inflect positively.” He believes that momentum is building at its casinos, particularly in Las Vegas, every week, which can drive positive estimate revisions. Last week, the Nevada Gaming Control Board approved the return to 100% occupancy with no social distancing at MGM’s Las Vegas Strip properties. Also, continued digital market share momentum with strong iCasino and sports betting share is another reason to be bullish, Greff said. The stock has rallied 26.3% year to date. In comparison, shares of Las Vegas Sands Corp. slipped 4.3%, Caesars Entertainment Inc. rallied 35.0% and DraftKings Inc. shed 3.9%, while the S&P 500 has advanced 10.4%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.