MGM Resorts International, the global hospitality and entertainment company, has seen its stock price plummet in recent months due to the COVID-19 pandemic and the subsequent closure of its casinos and resorts. However, analysts are optimistic that the stock can bounce back in the coming months as the economy slowly reopens and people start returning to travel and leisure activities.
MGM Resorts’ stock price hit a low of $7.01 in March when the coronavirus pandemic first started to take hold in the United States. Since then, the stock has seen some fluctuation but has not been able to fully recover as concerns about a second wave of infections loom large. Currently, the stock is trading at around $18.75, down from a high of $34.63 in January.
Despite the challenges facing the company, analysts believe that MGM Resorts’ strong brand and global presence will help it weather the storm and eventually emerge stronger. In a recent note to investors, Deutsche Bank analyst Carlo Santarelli stated that the company’s liquidity position and cost-saving measures should help it navigate through the current crisis and position it for long-term growth.
One of the key factors that analysts point to when discussing MGM Resorts’ potential for a rebound is its diverse business model. In addition to its flagship properties in Las Vegas, the company also operates casinos and resorts in Macau, one of the world’s largest gambling hubs. This diversification should help mitigate the impact of the pandemic on its bottom line and allow the company to capture opportunities as the economy bounces back.
In addition, MGM Resorts has taken proactive steps to cut costs and preserve cash in the midst of the crisis. The company reduced its workforce by furloughing employees and cutting executive salaries, and it also implemented a hiring freeze and scaled back capital expenditures. These measures have helped the company shore up its balance sheet and bolster its financial position.
Looking ahead, analysts are cautiously optimistic about MGM Resorts’ prospects. While the short-term outlook remains uncertain as the pandemic continues to disrupt travel and leisure activities, the long-term fundamentals of the company remain strong. As the economy gradually reopens and consumer confidence picks up, MGM Resorts should benefit from a rebound in travel and tourism, driving revenue and profits higher.
As investors look for opportunities in a volatile market, MGM Resorts’ stock may present an attractive option for those willing to take a long-term view. With its solid brand, diverse business model, and cost-saving measures, the company is well positioned to bounce back from the current crisis and deliver value to shareholders in the years to come.