This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

MGM Spikes on Upgrade, Sector Slips

(MGM article updated with stock prices.)

NEW YORK ( TheStreet) -- MGM Mirage (MGM - Get Report) is spiking after Goldman Sachs upgraded the casino operator to buy from neutral.

The brokerage firm expects Last Vegas will get "less bad" over the next several quarters. It also sees upside to MGM Mirageearnings and says MGM shares are undervalued compared with its competitors.

"MGM should also make progress on improving its balance sheet with a credit line extension, debt issuance or a capital raise from one of its joint ventures," Goldman Sachs wrote in a note.

Goldman also upped its target price on the stock to $16 from $10.

Still, Goldman did warn that the recovery in Vegas is in early stages and could come to a stand-still due to a weaker consumer or room overcapacity.

As a result of the upgrade, shares of MGM are increasing 9.3% to $11.91 in morning trading. The rest of the sector, however, is being left behind. Isle of Capri (ISLE - Get Report) is slipping 1.1% to $8.52, Ameristar Casinos (ASCA) is off 4.1% to $14.89 and Empire Resorts (NYNY - Get Report) is slipping 1.7% to $2.29.

Supply in Vegas has been a major concern for investors after the December opening of MGM's massive CityCenter development.

Many experts are still worried that 2010 will be another difficult year for the Vegas strip. On Monday, Standard & Poor's released a report saying the casino sector is unlikely to make a major recovery in 2010.

S&P also said that MGM, which relies heavily on the Las Vegas strip, has the biggest credit risk. Rivals like Wynn Resorts (WYNN - Get Report) and Las Vegas Sands (LVS - Get Report), which have a significant stance in Macau, are less risky.

-- Reported by Jeanine Poggi in New York.

Follow TheStreet.com on Twitter and become a fan on Facebook.

Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
ASCA $0.00 0.00%
ISLE $13.43 -2.10%
LVS $54.76 0.02%
MGM $21.30 0.02%
NYNY $4.49 0.00%

Markets

DOW 17,993.39 +280.73 1.58%
S&P 500 2,085.21 +24.19 1.17%
NASDAQ 4,939.6220 +48.4030 0.99%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs