MGM stock jumps 8% as Wall Street bets big on Vegas comeback

Shares of MGM Resorts International surged on Wednesday after multiple Wall Street firms upgraded the casino operator.

Analysts cited growing confidence that visitors and consumers are returning to the Las Vegas Strip following a prolonged period of weaker demand trends.

MGM stock climbed 9.62% to $42.15 during the session, placing the shares among the top gainers in the S&P 500.

The rally also put the stock on pace for its highest closing level since October 29, 2024, according to Dow Jones Market Data.

The gains followed upgrades from JPMorgan Chase and Truist Financial, both of which pointed to improving demand trends across the Las Vegas market and stronger expectations for MGM’s earnings outlook.

MGM operates a large portfolio of casino and resort properties across the Las Vegas Strip and also has exposure to online gambling and sports betting businesses.

Analysts see improving Las Vegas demand trends

Truist upgraded MGM shares to Buy from Hold and raised its price target to $55 from $42, implying roughly 32% upside from current levels.

A Truist analyst team led by Barry Jonas said the firm’s Las Vegas consumer surveys showed the MGM Grand as the most selected hotel destination among respondents.

The analysts said the findings increased confidence that consumers are returning to MGM properties across the Strip.

The firm also pointed to a “strong market-wide” group and event calendar alongside easier summer comparisons that could help support business momentum over the coming quarters.

“Barring worsening geopolitical/macro noise, we see the potential for upside revisions to Street earnings estimates, which, combined with improving investor sentiment, should drive MGM valuation higher,” the analysts wrote. 

Separately, JPMorgan upgraded MGM to Overweight from Neutral and increased its price target to $46 from $41.

Analyst Daniel Politzer said the bank has growing confidence that MGM Las Vegas Strip Earnings Before Interest, Taxes, Depreciation, Amortization, and Restructuring/Rent costs (EBITDAR) estimates have bottomed and could begin improving in the coming months.

The firm expects growth to strengthen against easier comparisons and continued resilience among US leisure travelers.

“There's no shortage of cheap gaming stocks, but MGM is one of the few where estimates are poised to move higher,” the JPMorgan analysts wrote.

Inflation risks remain under watch

Analysts acknowledged that inflation and higher fuel costs could still pressure discretionary consumer spending, particularly for leisure travel.

However, JPMorgan said MGM’s promotional strategy and customer base could help offset some of those risks.

“The impact of inflation and fuel prices requires monitoring, but the value-oriented promotions and around 50% of Las Vegas Strip traffic from drive-in customers should support demand,” the analysts wrote.

JPMorgan also said it was increasingly comfortable with the long-term supply and demand outlook for the Las Vegas Strip ahead of the planned opening of the Hard Rock property in late 2027.

The bank added that concerns around cannibalization risk from additional supply may be overstated and could potentially stimulate broader market demand instead.

Politzer also highlighted MGM’s approximately 14% implied free cash flow yield, share repurchases, short interest levels, and valuation support tied to strategic factors, including the Caesars deal and IAC ownership stake. 

MGM shares have risen roughly 14% this year and are up approximately 31% over the past 12 months. However, the stock remains well below its record closing high of $99.75 reached in October 2007.

According to FactSet data, MGM currently holds an average Overweight rating among analysts, with a consensus price target of approximately $45.26.