Global hospitality and entertainment company MGM Resorts International (MGM) recently announced that it has entered into an agreement to sell the operations of The Mirage Hotel & Casino to Hard Rock International for a cash consideration of $1.075 billion. The deal is likely to close in the second half of 2022.
Following the news, shares of the company appreciated marginally to close at $40.36 in the extended trading session on Monday.
Details of the Deal
Post the sale, MGM Resorts will retain The Mirage name and brand, licensing it to Hard Rock royalty-free for a maximum period of three years.
Further, MGM Resorts expects net cash proceeds after taxes and estimated fees from the sale to be roughly $815 million.
Management Commentary
The Chairman of the Board of Directors of MGM Resorts, Paul Salem, said, “The monetization of our entire real property portfolio, together with the addition of CityCenter and our agreement to acquire The Cosmopolitan of Las Vegas, will position the Company with a fortress balance sheet, premier portfolio, and significant financial resources to pursue our strategic objectives.”
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Price Target
Recently, CBRE analyst John DeCree initiated coverage on the stock with a Buy rating and a price target of $56, which implies upside potential of 38.8% from current levels.
According to the analyst, the domestic casino and the digital gaming industry remains on a strong footing in spite of the fears emanating from the spread of the Omicron variant.
Overall, the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 4 Buys, 6 Holds and 1 Sell. The average MGM Resorts price target of $53.73 implies that the stock has upside potential of 33.2% from current levels. Shares have gained about 36.7% over the past year.
Website Traffic
TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings, the world’s biggest website usage monitoring service, offers insight into MGM Resorts’ performance this quarter.
According to the tool, the website of MGM Resorts recorded a 45.60% monthly rise in global visits in November, compared to the same period last year. Further, year-to-date, MGM website traffic has grown 31.05%, compared to the previous year.
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