MGM Named Top Thematic Idea by Citi

Shares of MGM Resorts International (NYSE:MGM) are upwardly more than 16% over the past tense month, prompting some analysts to speak out the stock up is building sec half momentum.

In a story come out today, Citi previews its top out thematic ideas for the back up half of 2022. The cant highlights stocks with purchase to variou themes, including artificial intelligence, automation, internet-based business models, emerging markets consumers, richly brand acknowledgement and meshwork 0 exposure. MGM is ace of 30 names on the list.

From here, we seem under the bonnet of these baskets and provide a heel of Citi Buy rated stocks that have high/medium exposure to what we believe are the to the highest degree attractive themes within the S&P 500,” strategian Sir Walter Scott Chronert wrote. “Stocks with negative expected earnings growth are removed, with the remaining stocks ranked past expected sum up return.”

MGM appears on Citi’s “Thematic 30” list due to its rising consumer exposure. In fact, the cassino operator scores 65.5%, tracking only when General Motors (NYSE:GM). The Bellagio manipulator is the only if gaming equity on the list.

MGM Can Offset International Risk

Citi’s call in that MGM is a dramatic play on rising marketplace consumer trends is believable as the manipulator owns 56% of MGM China.

That agency exposure to Macau, which has been a vexing proposition for casino operators this twelvemonth amid China’s ongoing crackdown on COVID-19 cases. As such, MGM People's Republic of China is resisting important investments inwards the special administrative neighborhood (SAR) for the clip being. Fortunately, to a greater extent so than the other US-based firms operating there, MGM has outlets for offsetting PRC risk.

“Las Vegas Strip results were solid, and it seems ilk exact and disbursal patterns experience shown no more signs of slowing through and through July,” wrote Stifel psychoanalyst Steven Wieczynski in a recent annotation on MGM.

He rates the carry “hold” with a $42 cost target. The Excalibur manipulator has the largest step on the Strip.

Other Favorable MGM Factors

While Citi praised MGM as an rising consumer play, the society also checks the boxes of enviable make acknowledgement and some cyberspace exposure via its BetMGM unit.

In fact, the iGaming and online sports wagering business is a potency sec half accelerator for MGM shares inwards its own right. That could turn out to follow the display case if the manipulator keeps a lid on promotional spending through football season and if it capitalizes on the recent legalization of sports wagering in Massachusetts.

“Putting it all together, we imagine management has painted a compelling strategic vision consisting of their plus optimization, online gambling, and proposed structured resort hotel development initiatives,” concludes Wieczynski.