Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
David Katz of Jefferies on May 1 wrote about MGM Resorts’ prospects after its first-quarter earning call on April 29:
“Our Buy criteria remain business model quality, management execution, and visible growth. For MGM, we see risk to the first and third. We view its broad-based operating company/property company structure as an overhang to long-term earnings durability, despite management operating the business well. Near term, Las Vegas leisure volatility and increasingly tougher Macau comps should mute growth prospects. Following the Northfield Park sale, we resume coverage and downgrade to Hold.”
Truist Securities’ Barry Jonas looked at VICI Properties on April 30:
“VICI reported adjustable funds from operations/share ~+1% to us but inline to the Street, and raised 2026 adjustable funds from operations guidance by +3% at the midpoint on the back of recent deals. Management remains excited about the Golden Entertainment sale lease back (closed today) and plans to further the relationship by exploring new and existing projects. Management also echoed positive Las Vegas Strip commentary shared by operators this past week, which is also apparent in today’s March Nevada GGR release. We flow through the quarter and take our estimates to the midpoint of the guide mainly driven by the Golden deal. We reiterate our Buy rating and $38 price target given VICI’s proven ability to execute despite the uncertain macro and volatile rate environment.”
Fitch Ratings issued a release on the U.S. Gaming, Lodging, and Leisure sector:
“(The sector) faces increasing uncertainty as the Iran conflict drags on and higher oil prices feed inflationary pressures and weaker consumer sentiment. Fitch does not expect widespread negative rating actions because the sector’s ratings already reflect its inherent cyclicality, and most Fitch-rated issuers have sufficient rating headroom to weather a downturn.
“The Iran conflict, which now appears more protracted than initially expected, has shifted the sector’s risk profile. In addition to the direct oil price shock, the cumulative effect of sustained inflationary pressure will affect consumer confidence and discretionary spending, and sentiment indicators suggest consumers are increasingly cautious about non-essential expenditure.”
