MGM on Buyback Binge, Sees Cosmopolitan Buy Closing in Q2

MGM Resorts International (NYSE:MGM) reported fourth canton results that blew past Wall Street estimates. That’s piece noting it’s buying back up a important amount of its stock, and that a brace of marquise transactions are slated to secretive inward the endorse quarter.

In the last leash months of 2021, the Bellagio operator earned 12 cents a apportion on revenue of $3.06 billion. Analysts expected earnings per deal of nine cents on sales of $2.76 billion.

On the Las Vegas Strip, where MGM is the largest operator, revenue was $1.8 billion, or 26 percent to a higher place the comparable period inward 2019. Adjusted dimension earnings before interest, taxes, depreciation, amortization, and restructuring or rip costs (EBITDAR) were $699 million, or 84 percent higher than the Oct through Dec full stop inwards 2019.

Including Aria, MGM said fourth-quarter cassino revenue surged 40 percent spell noting the full point was the firstly time since the go of the coronavirus pandemic the rated 65-and-over eld demographic in Las Vegas returned to pre-crisis levels inward terms of way nights.

While the emersion of the omicron variant is likely to weigh on cassino operators’ first-quarter results, analysts are bullish on the outlook for MGM.

“We believe the company is positioned to ascertain continued ontogenesis that we experience seen o'er the last six-plus months as we lead into Q2,” said Macquarie psychoanalyst Chad Beynon in a notation to clients today. “Management guides to a ‘full normal’ in Las Vegas inward Q2 2023.”

Beynon rates MGM “outperform,” and lifted his toll mark on the shares to $62 from $60, implying upside of 30 percent from the Feb. 9 close.

Busy Q2 Coming for MGM

The Apr through and through June time border is defining upward to live an fighting(a) single for the Mandalay Bay operator.

On a conference call with analysts, MGM CEO Bill Hornbuckle said the keep company expects to faithful the $1.6 1000000000000 acquisition of Cosmopolitan’s operating rights inwards the indorsement quarter. That trade was proclaimed lastly September. Additionally, VICI Properties (NYSE:VICI) is scheduled to wrapper upwardly its $17.2 1000000000 purchase of MGM Growth Properties (NYSE:MGP) inwards the next quarter.

“On January 14, 2022, MGM Growth Properties LLC paid a dividend of $82 million, and the company (MGM) concurrently received a $58 one thousand thousand distribution,” according to a financial statement issued past MGM.

The casino manipulator is also getting a one-percent stakes inwards a new operating percent partnership formed past VICI.

MGM also noted that its $1.075 1000000000000 cut-rate sale of Mirage’s operating rights to Hard Rock International is slated to wrapper up inwards the secondly half of this year.

MGM Buyback Bonanza

In the 4th quarter, MGM repurchased $727 trillion worth of its shares at an norm damage $42.42. That brings the operator’s come buyback to just over $2.1 billion, or 10.5 percent of its securities industry capitalization, since in conclusion March, said CFO Jonathan Halkyard on the group discussion call.

We also passion management’s approach shot to capital allocation. MGM’s tangible acres strategy, at its core, was designed to pull up note value from its owned tangible estate, and allot it to the shareholders,” said Stifel psychoanalyst Steven Wieczynski inward a line to clients. “Management has been beyond dynamic here, repurchasing another $727M of gillyflower during the canton and has continued that speedy gait into 1Q22.”

Year-to-date, MGM already repurchased $370 1000000 of its have shares.

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