New casino operations and a healthy cash flow should help boost MGM Resorts in the year ahead, according to Credit Suisse. Analyst Benjamin Chaiken upgraded the stock to outperform from neutral, saying Tuesday in a note to clients that the company deserves a second look from investors. "MGM has gone through a transformation, recently announcing four transactions, and we believe the market is not giving full credit," the note said. The company has been shuffling its portfolio, selling off some of its real estate subsidiaries while also buying the operations for CityCenter and The Cosmopolitan in Las Vegas. That new structure should make the stock more attractive to investors and open up new opportunities for the company, Credit Suisse said. "MGM is a consensus Neutral name, in part due to a 'conglomerate discount,' but we think sentiment will improve. This should change now that business is being streamlined. ... Further, MGM will end up with ~$9bn of cash, and can either buy back a material portion of its market cap, or invest in high growth areas such as sports betting," the note said. Credit Suisse raised its price target for MGM to $68 per share from $33 per share. The new target is 53% above where the stock closed Monday. The investment firm acknowledged the ongoing review of casinos in Macao as a risk to MGM but said that the value of MGM China was only $4 per share for MGM's stock. —CNBC's Michael Bloom contributed to this report.
MGM Resorts signage during the USA Womens National 3x3 Team practice on July 13, 2021 at Mandalay Bay Convention Center in Las Vegas, Nevada.
Stephen Gosling | National Basketball Association | Getty Images
New casino operations and a healthy cash flow should help boost MGM Resorts in the year ahead, according to Credit Suisse.