What Happened?
Shares of hospitality and casino entertainment company MGM Resorts (NYSE: MGM) fell 3.2% in the afternoon session after analysts lowered their price targets, citing concerns about weaker-than-expected growth in Las Vegas.
Specifically, Mizuho trimmed its price target to $56 from $58, pointing to a slowdown in the company's Las Vegas operations. The firm noted that hotel revenue was not as strong as hoped, driven by a key metric called RevPAR, or Revenue Per Available Room, which fell more than expected. This led Mizuho to lower its earnings forecast for MGM's Las Vegas business.
Adding to the cautious sentiment, Deutsche Bank also slightly reduced its price target on the stock to $53 from $54. While stronger results from Macau helped to soften the blow from the Vegas weakness, the analyst actions signaled growing concerns about the company's performance in its core market.
The shares closed the day at $34.49, down 3.7% from previous close.
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What Is The Market Telling Us
MGM Resorts’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 20 days ago when the stock dropped 2.5% on the news that the major indices continued to retreat (Nasdaq -1.5%, S&P 500 -1.2%) amid profit-taking and renewed concerns about tariffs.
Investors reacted to a federal court ruling that most of President Trump's global tariffs were illegal, raising uncertainty over trade policy and the fiscal impact of potential refunds. Rising Treasury yields added to the pressure, with the 10-year climbing above 4.2% and the 30-year nearing 5%, intensifying worries about stretched equity valuations. September's historically weak track record for stocks further dampened sentiment, leaving traders cautious ahead of the jobs report later in the week and the Federal Reserve's upcoming rate decision.
MGM Resorts is up 2.8% since the beginning of the year, but at $34.59 per share, it is still trading 17.6% below its 52-week high of $41.99 from October 2024. Investors who bought $1,000 worth of MGM Resorts’s shares 5 years ago would now be looking at an investment worth $1,600.
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