MGM Resorts International: Mizuho Downgrades to Outperform, PT to $58 from $59.

MGM Resorts International: Mizuho Downgrades to Outperform, PT to $58 from $59.

MGM Resorts International (NYSE: MGM) experienced a mixed reaction following the release of its Q2 2025 earnings report. While the company's financial performance exceeded analyst expectations, the stock price fell slightly in aftermarket trading. The primary concern among investors was the widening EBITDAR loss in the online betting business, which offset the positive growth in other segments.

The company reported $4.4 billion in revenue, a 2% increase from the previous year, and an adjusted EPS of $0.79, which was well above the $0.55 analysts’ estimates [1]. However, the stock price declined by 0.67% amid fears that the online betting business was hurting profitability. This was primarily due to a 100% increase in EBITDAR loss to $26 million in the MGM Digital segment, despite a 14% increase in iGaming revenues [1].

MGM China and Regional Operations segments provided strong performances. Las Vegas Strip Resorts reported revenues of $2.1 billion, a 2% year-over-year decline, attributed to room remodels and lower revenues from table games. Meanwhile, MGM China reported $1.1 billion in revenue, a 9% yearly rise, with adjusted EBITDAR rising 3% to $301 million. The Regional Operations segment also reported net revenues of $965 million, a 4% increase, with adjusted EBITDAR rising 7% to $309 million [1].

The BetMGM venture, a joint venture between Entain and MGM Resorts, raised its annual guidance after an impressive performance in the first half of the year. It now expects full-year revenues to be at least $2.7 billion and EBITDA to be at least $150 million. This is the second upward revision in the past two months and implies EBITDA improvement by at least $400 million compared to last year [1].

Despite the mixed sentiment, Mizuho downgraded its rating on MGM Resorts International to "Outperform" with a new price target of $58, down from $59. The downgrade was attributed to higher capital expenditures and challenges in the Las Vegas market. However, the overall Street sentiment towards the company is mixed, with some brokerages raising the target price while others remain cautious [1].

MGM Resorts maintains an optimistic outlook, with CEO Bill Hornbuckle expressing confidence in the company's trajectory. He emphasized the potential benefits of capital investments and strong convention bookings in Las Vegas and the long-term digital strategy of the company [1]. The company expects continued strength in Las Vegas, with the BetMGM venture progressing towards its $500 million EBITDA goal and the MGM Digital segment expected to become profitable in the coming years.

References:
[1] https://casinobeats.com/2025/07/31/mgm-q2-2025-earnings-stock-slides-digital-losses/