SKN | Wells Fargo Reiterates Underweight on MGM Resorts, Keeps $31 Target

Key Points:

• Wells Fargo maintained an Underweight rating on MGM Resorts International with a $31 price target.
• The firm lowered several 2026 EBITDAR estimates, citing weather impacts and weaker regional performance.
• Despite some strength in Las Vegas operations, broader valuation concerns remain.

Wells Fargo has reiterated its Underweight rating on MGM Resorts International, keeping its $31 price target, below current trading levels. The call reflects continued concerns about valuation and near-term earnings visibility, even as certain segments of the business show resilience.

Regional Weakness Drives Estimate Cuts

Wells Fargo lowered its 2026 EBITDAR forecasts for regional operations, pointing to weaker-than-expected performance.

Factors behind the revision include negative weather impacts on gaming revenue and timing adjustments related to the Northfield Park acquisition.

These changes suggest softer demand trends in regional markets, which are an important contributor to overall earnings.

Mixed Performance Across Key Segments

In Las Vegas, MGM Resorts International saw a more balanced outlook.

While first-quarter estimates were reduced due to expense visibility, the firm raised its full-year Las Vegas EBITDA forecast, indicating confidence in the longer-term strength of the segment.

Meanwhile, estimates for MGM China were lowered due to weaker gaming hold during the Chinese New Year period, though expectations for the remainder of the year remain broadly stable.

Digital Segment Offers Longer-Term Upside

Wells Fargo left its forecasts for MGM’s digital business unchanged but expects the segment to turn positive in late 2026, with further improvement projected into 2027 and 2028.

This suggests potential long-term growth drivers, even as near-term pressures weigh on overall performance.

Market Interpretation

Maintaining an Underweight rating alongside reduced earnings estimates is typically viewed as a clear cautious signal.

The price target below current levels indicates that Wells Fargo sees limited upside and potential downside risk in the stock.

Outlook

Looking ahead, MGM Resorts International’s performance will depend on regional demand recovery, Las Vegas trends, and execution in its digital segment.

For now, Wells Fargo’s stance reflects ongoing concerns about valuation and earnings trajectory despite pockets of operational strength.

For confidential inquiries, partnership opportunities, or deeper insights into gaming sector trends, valuation analysis, and equity positioning strategies, we invite you to connect directly with the SKN team for professional engagement.