David Katz, equity analyst for Jefferies, July 30 wrote an update about BetMGM and its future ownership structure. “In short, BetMGM maintained its revenue guidance of $18 billion-$2.0 billion and to be EBITDA positive in the second half of 2023. Market share was lower than the update six months ago, which is not surprising given the public GGR disclosures by states, at 27% in igaming and 11% in online sports betting.
“More important, from the perspective of investors, is whether MGM would consider a new bid for joint venture partner Entain when the standstill period ends on 8/8. We continue to believe that it is more likely than not and would be supportive of MGM doing so, pending the terms.”
Analyst Barry Jonas of Truist Securities July 28 wrote that June Las Vegas Strip win “fell a modest -1% year-over-year (second quarter: Flat) though the contraction was largely due to a tough baccarat comp; while locals (June: -10% year-over-year; second quarter 2023: -3%) and Downtown GGR (June: -11% Y/Y; Q2: -3%) were weaker. Visitation statistics were strong, with Strip RevPAR (revenue per available room)/ADR (average daily rate) up +8%/+5% year-over year (second quarter 2023: +4%/+2%). Overall, June data was largely in-line with expectations given tough comps, though could imply upside to our Strip (MGM and Caesars) second quarter earnings.”
J.P. Morgan analyst Joseph Greff, July 28 on Gaming and Leisure Properties wrote that “Following second quarter 2023 results, our 2023 and 2024 full-year EBITDA estimates are largely unchanged, at $1.30 billion and $1.32 billion respectively, while our full-year AFFO (adjusted funds from operations) estimates move slightly higher to $999 million (+$7 million) in 2023 and $1.025 billion (+ $10 million) in 2024, on lower net interest expense. We project AFFO per share of $3.68 for this year and $3.78 in 2024.”
In a note released July 28, Fitch Ratings stated that its “share of Negative Outlooks has increased slightly for our portfolio of publicly and privately rated global non-financial corporates in the past six months, even though net rating activity was slightly positive during second quarter 2023. The small shift in our rating outlook mix suggests there is potential for more downgrades in the near term, amid waning demand in many markets and sectors, higher input costs and rising interest rates, which could weigh on cash flows and credit profiles.”
