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BofA Upgrades MGM Resorts: 'Could Become A Story Stock'

BofA Upgrades MGM Resorts: 'Could Become A Story Stock'
MGM Resorts International (NYSE:MGM) shares traded higher on Monday after the company landed an analyst upgrade as it continues to roll out its BetMGM sports betting app.

The Analyst: Bank of America analyst Shaun Kelley upgraded MGM from Underperform to Neutral and raised his price target from $25 to $35. Kelley also downgraded Las Vegas Sands Corp. (NYSE:LVS) from Buy to Neutral and reiterated his $57 target price.

The Thesis: Kelley said his ratings adjustments are based on his increasingly bullish outlook for a recovery in Las Vegas and a booming U.S. online sports betting market. At the same time, Kelley is growing increasingly cautious on the outlook for Macau, China.

“In Macau, we see little change to the near-term low visibility regime, especially with the recent slowdown in China travel from increased COVID cases,” Kelley wrote in the note.

He said Las Vegas Sands is highly exposed to mass-market gamblers in Macau, which should be a long-term growth driver for the stock. However, in the near term, mass-market revenue is more exposed to travel visa restrictions and the need for widespread vaccinations.
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