Recent and sharp declines in stock price and some solid revenue from domestic operations makes MGM Resorts International a good play for investors, Brean Murray Carret & Co. said Tuesday, while raising its rating on the gaming and entertainment company.
"With regional markets maintaining gaming revenue trends through August despite the economic headlines and Las Vegas significantly outpacing regional markets over the last several months, we have increased confidence that Las Vegas gaming trends can surprise on the upside if the economic recovery continues," wrote analyst Ryan Worst.
In addition to strong gaming revenue on the Las Vegas Strip, revenue per available room also improving, Worst said.
Brean Murray expects Las Vegas gaming and room revenue to rise 6 percent and 10 percent, respectively in 2012.
What's more, MGM shares have tumbled more than 30 percent since the end of July, Worst points out, which reduces further the odds that shares will have much more of a downside.
That is especially true given the company's strong performance in Asia. He boosted the Las Vegas company's rating to "Buy" from "Hold" and reiterated a $15 price target.
Shares of MGM rose 18 cents to $10.50 in premarket trading.