Deutsche Bank Remains Positive On MGM Resorts Following Earnings

In a research report released today, Deutsche Bank analyst Carlo Santarelli reiterated a Buy rating on MGM Resorts International (NYSE:MGM) with a $29 price target, even though the company reported a loss of $342.3 million, or 70 cents a share, compared with a year-earlier loss of $56.8 million, or 12 cents a share.

Santarelli noted, “Into expectations of flat to down, MGM guided 1Q15 RevPAR to +2-3% y/y, implying a two-year stack comparison of +16-17% and delivered on its prior commentary that it hoped to grow RevPAR in each quarter of the year. With; 1) RevPAR still well below peak (2014 was 15% below 2007 absolute dollar RevPAR), 2) a trough 1Q15 that is likely to still show 2-3% RevPAR growth, 3) no new supply, 4) undaunting gaming comparables throughout the year, 5) traction in the lower end assets on both a RevPAR and EBITDA basis, and 6) margins that have meaningful room to expand, we see the Strip story as firmly in place and hence we again reinforce our Buy rating.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Carlo Santarelli has a total average return of 8.8% and a 60.9% success rate. Santarelli has an 4.2% average return when recommending MGM, and is ranked #676 out of 3476 analysts.

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