MGM Resorts International’s Japan integrated resort project could add US$31 per share to the company’s value upon opening in 2030, according to latest analysis by J.P. Morgan, reflecting a modest estimate of US$1.5 billion in annualized EBITDA and over US$600 million in free cash flow.
The US$10 billion MGM Osaka could also be worth US$19 per share today on a discounted basis, although the fact that opening is still four years away – beyond many investors’ time horizons – means the stock is unlikely to fully reflect its value anytime soon.
In a note updating MGM’s share price situation in the wake of the recent offer by Barry Diller’s People Inc to acquire the remainder of the company at an offer price of US$48.30 per share, J.P. Morgan’s Daniel Politzer, Samuel Nielsen and Michael Hirsh observed that although the share price has dropped back to US$47 after peaking at US$51 post-offer, Diller’s acquisition offer could still increase – especially if MGM Osaka is ultimately ascribed “meaningful value.
