Truist upgrades MGM Resorts, says strong 2023 Las Vegas Strip calendar can boost stock more than 30%
MGM Resorts could be in for a big rally in the new year thanks to a jam-packed events calendar on the Las Vegas Strip, according to Truist. Analyst Barry Jones upgraded the casino operator to buy from hold. He also hiked his price target on the stock to $50 per share from $40. The new estimate implies upside of 34% from Friday's close of $37.08. MGM shares popped 3.7% in the premarket. "While we've historically been more cautious on bear-case macro risks to the Strip and destination markets, we would expect MGM to see relative outperformance in 2023 on the Strip's strong event calendar and returning midweek business travel," Jones said. CES, an annual trade show for the tech industry, is slated for the first quarter of 2023, with attendance expected to total about 170,000. This event was held in Las Vegas last year, but Jones noted that comps will be easy to beat as the omicron Covid variant breakout hindered turnout. Other events slated to take place on the strip include the Formula One Las Vegas Grand Prix in the third quarter and the Electric Daisy Carnival in the second quarter. Attendance for the former is expected around 170,000, while turnout for the latter is forecast at more than 400,000, Truist said. To be sure, Jones said that rising flight and hotel costs could hurt the stock. Still, he thinks that "the number and quality of events planned for Vegas should drive relative outperformance." — CNBC's Michael Bloom contributed reporting.