MGM Resorts International is experiencing a favorable shift in investor sentiment as JPMorgan upgraded its rating from neutral to overweight, raising the 12-month price target from $41 to $46.
Analyst Daniel Politzer noted that the company's earnings before interest, taxes, depreciation, amortization, and rent (EBITDAR) estimates for the Las Vegas Strip have likely bottomed out, suggesting an upcoming improvement in growth driven by stable tourism numbers and resilient U.S. leisure travel. Following the upgrade, MGM's shares surged 9%, marking a 31% increase over the past year.
Despite concerns about potential travel limitations due to rising fuel prices linked to geopolitical tensions, Las Vegas tourism has remained steady, with approximately 9.7 million visitors recorded in 2026, consistent with previous years. The strong performance is attributed to value-driven promotions at casino-hotels and a steady influx of drive-in customers.
Furthermore, JPMorgan anticipates that MGM's properties could benefit from the upcoming opening of Hard Rock Las Vegas in late 2027, as historical data suggests that new openings can positively impact existing properties. This optimistic outlook contrasts with the broader Wall Street consensus, where a significant portion of analysts maintain a hold or sell rating on MGM stock