Is MGM Stock Poised To Rise To $50 With Macau's Recovery?

Core Viewpoint - MGM Resorts stock is currently trading at $44 per share, approximately 19% below its pre-inflation shock high of $50, but has shown strong recovery in recent quarters due to increased tourist arrivals and spending in Macau [1][2]. Group 1: Stock Performance - MGM stock has increased by 50% from around $30 in early January 2021 to approximately $45 now, compared to a 45% increase in the S&P 500 over the same period [2]. - The stock's returns were 42% in 2021, -25% in 2022, and 33% in 2023, indicating underperformance in 2022 compared to the S&P 500 [2]. - The stock needs to gain about 13% to return to its pre-inflation shock level of $50 per share, with an estimated valuation of around $47 per share, suggesting limited near-term upside due to global economic concerns [3][4]. Group 2: Financial Recovery - MGM's revenues were $5.2 billion in 2020, recovering to $9.7 billion in 2021, $13 billion in 2022, and reaching $16.2 billion in 2023, reflecting a strong recovery trajectory [7]. - The company posted a loss of -$2 per share in 2020, but earnings improved to $3.39 per share in 2023, indicating a significant turnaround [7]. Group 3: Market Context - Tourist arrivals in Macau increased by 79.4% to 8.88 million in Q1 2024, nearing 86% of pre-pandemic levels, contributing to MGM's recovery [1]. - The Federal Reserve has kept interest rates unchanged since August 2023, with potential cuts expected in 2024, which may positively influence market sentiment [5][8].