MGM Mirage Gains on Broker Move
MGM Mirage (MGG ) shares gained as much as 2% Thursday after a Wall Street analyst said there's still plenty of room for the stock to roar.
Although the stock is at 52-week highs, it will rise further to hit $87 over the next year, contends J.P. Morgan's Harry Curtis, who on Thursday raised his price target to that level from $72.
In reaction, shares were up 71 cents, or 1.0%, at $72.75, after hitting $73.50 earlier in the session. MGM Mirage and other big casino company stocks have been on a roll this year, with the Dow Jones U.S. Gambling Index up about 32% in 2004.
Booming Las Vegas business, MGM Mirage's pending acquisition of Mandalay Resort Group (MBG) and increasing opportunities abroad could boost the company in the new year, Curtis wrote in a research note. (J.P. Morgan does and seeks to do business with companies covered in its research reports.)"The stock remains one of our favorite picks to outperform the S&P 500 in 2005," Curtis wrote. "Our thesis of pricing strength in Las Vegas and the first-quarter 2005 merger with Mandalay driving 20%-plus EPS growth is as powerful in early 2005 as it was in early 2004 when we initially recommended MGM Mirage." Curtis views near-term trends on the Las Vegas strip as bullish. "Recently, we spoke with several casino operators in Las Vegas who confirmed our positive forward room pricing data for the New Year's holiday week," he wrote. "Most hotels are either sold out or are reserving 1% to 2% of their rooms for either the highest rollers or last-minute cash-paying customers willing to spend at least $500 a night for a room." But more important, contends Curtis, is that room prices for January and February continue to increase. Going forward, MGM Mirage is poised to benefit from gambling expansion abroad, Curtis wrote, noting that on Wednesday the government of Singapore announced it will accept preliminary proposals on a casino resort as it decides whether to open the island state to Las Vegas-style casino gambling. MGM Mirage has already announced developments in the Chinese enclave of Macao and the U.K., where the government is working to liberalize gaming.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV