MGM Resorts International

This is our first report on MGM, one of the largest owners and operators of casinos, hotels, and entertainment resorts in the world. The company reported a mixed quarterly result, surpassing Wall Street expectations in terms of revenues but reporting wider than expected losses.  Its domestic business has been strong with the Las Vegas Strip reaching new highs for revenues. Cosmopolitan Las Vegas continued to surpass the company’s early projections while operating under MGM Resorts’ direction and had one of its finest quarters. With Cosmopolitan, they continue to see opportunities for growth as they work to better connect it physically to their sister properties and integrate their rewards program. BetMGM also continues to grow in its performance every quarter. Kansas became BetMGM’s latest new market. Their luxury resorts, where pricing is still strong, show particularly outsized strength. Their convention room mix is also pacing at their objective of 19% with higher ADRs year over year. In addition, MGM Rewards continues to deliver promising results to its members. We initiate coverage on the stock of MGM Resorts International with a ‘Buy’ rating.