Does MGM Resorts’ (MGM) Luxury Dining Push Reveal a Shift in Long-Term Brand Strategy?

• In a move to elevate Las Vegas' culinary landscape, ARIA Resort & Casino announced plans to debut the renowned Two Michelin-starred Gymkhana restaurant this fall, aiming to enhance its standing among luxury dining destinations.
• This partnership brings a flagship international brand to the Strip, reinforcing ARIA’s commitment to high-end experiences and targeting discerning global travelers.
• Now, we'll assess how ARIA's high-profile restaurant launch intersects with MGM Resorts International's evolving investment outlook and profitability challenges.

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MGM Resorts International Investment Narrative Recap

To be a shareholder in MGM Resorts International, you need to believe in the sustained appeal of Las Vegas as a destination, and MGM's ability to enhance demand through premium experiences like ARIA's planned Gymkhana restaurant launch. While this high-profile opening could support MGM's strategy to capture upscale visitors, it is unlikely to materially shift the most important catalyst, expansion in digital gaming and sports betting, or offset the main risk, which remains weakness in Strip leisure visitation.

Among recent announcements, MGM's share buyback activity stands out, with over 7 million shares repurchased for US$200 million in the latest quarter. While this may reflect a commitment to returning value to shareholders, its short-term impact is distinct from growth initiatives like Gymkhana, which play into the company's focus on higher-margin hospitality and premium experiences to support longer-term earnings.

Yet, investors should also be aware that even as MGM invests in headline-grabbing luxury offerings, challenges persist around...

Read the full narrative on MGM Resorts International (it's free!)

MGM Resorts International's outlook anticipates $18.4 billion in revenue and $906.1 million in earnings by 2028. This is based on a forecasted annual revenue growth rate of 2.2% and an earnings rise of $369.7 million from the current $536.4 million.

Uncover how MGM Resorts International's forecasts yield a $47.78 fair value, a 35% upside to its current price.

Exploring Other Perspectives

Eight fair value estimates from the Simply Wall St Community for MGM range from as low as US$3 to as high as US$86.31. While opinions widely vary, the growth of digital gaming and betting remains a key driver to watch for the company's future results.

Explore 8 other fair value estimates on MGM Resorts International - why the stock might be worth over 2x more than the current price!

Build Your Own MGM Resorts International Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your MGM Resorts International research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.
• Our free MGM Resorts International research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate MGM Resorts International's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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