Stock Analysis & Valuation MGM Resorts International (0JWC.L)

• Previous Close: £32.83
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, £	Upside, %
Artificial intelligence (AI)	47.70	45
Intrinsic value (DCF)	12.70	-61
Graham-Dodd Method	4.00	-88
Graham Formula	26.70	-19

Strategic Investment Analysis

Company Overview

MGM Resorts International (LSE: 0JWC.L) is a leading global hospitality and entertainment company specializing in casino resorts, luxury hotels, and premium gaming experiences. Headquartered in Las Vegas, Nevada, MGM operates iconic properties on the Las Vegas Strip, regional destinations across the U.S., and MGM China in Macau. The company’s diversified portfolio includes 29 gaming and hospitality venues, offering slots, table games, high-end accommodations, fine dining, entertainment, and convention spaces. MGM has expanded into digital gaming through BetMGM, a joint venture providing online sports betting and iGaming. As a key player in the consumer cyclical sector, MGM Resorts capitalizes on tourism, premium gaming, and corporate events, positioning itself as a dominant force in the global gambling and resorts industry. With a strong brand presence and strategic investments in digital platforms, MGM continues to drive growth in both traditional and emerging gaming markets.

Investment Summary

MGM Resorts International presents a high-risk, high-reward investment opportunity due to its exposure to the cyclical hospitality and gaming industry. The company benefits from a strong portfolio of premium properties, particularly in Las Vegas and Macau, and has shown resilience post-pandemic with $17.24B in revenue (FY 2024). However, its high leverage ($31.61B total debt) and beta of 1.789 reflect significant volatility and sensitivity to economic downturns. The lack of dividends may deter income-focused investors, but growth potential lies in BetMGM’s expansion and recovery in Macau’s gaming market. Investors should weigh MGM’s brand strength against macroeconomic risks and regulatory pressures in key markets.

Competitive Analysis

MGM Resorts International competes in the high-stakes global gaming and hospitality industry, where its primary advantages include brand recognition, integrated resort offerings, and a diversified revenue stream from gaming, entertainment, and conventions. Its Las Vegas Strip properties (e.g., Bellagio, MGM Grand) are market leaders, attracting premium customers. Regionally, MGM’s Beau Rivage and Borgata strengthen its U.S. footprint, while MGM China holds a strategic position in Macau. BetMGM, a 50/50 joint venture with Entain, is a key differentiator in the rapidly growing U.S. online sports betting and iGaming sector, competing with DraftKings and FanDuel. However, MGM faces intense competition from Las Vegas Sands and Wynn Resorts in luxury gaming, as well as Caesars Entertainment’s scale in regional casinos. The company’s heavy debt load could limit flexibility compared to rivals with stronger balance sheets. Macau’s regulatory environment remains a wildcard, though MGM’s non-gaming investments align with local diversification mandates. Overall, MGM’s integration of physical and digital gaming provides a competitive edge, but execution risks persist.

Major Competitors

• Las Vegas Sands Corp. (LVS): Las Vegas Sands dominates the Macau and Singapore markets with luxury integrated resorts like The Venetian and Marina Bay Sands. Its focus on mass-market gaming and non-gaming revenue (conventions, retail) provides stability, but it lacks a U.S. digital gaming presence. Sands’ stronger balance sheet and Asian exposure contrast with MGM’s higher U.S. leverage.
• Wynn Resorts (WYNN): Wynn Resorts excels in ultra-high-end gaming with properties like Wynn Las Vegas and Wynn Macau. Its smaller scale limits diversification compared to MGM, but superior EBITDA margins reflect premium positioning. Wynn’s digital push via Wynn Interactive lags behind BetMGM’s market share.
• Caesars Entertainment (CZR): Caesars boasts the largest U.S. regional casino network and a leading online sportsbook (Caesars Sportsbook). Its Harrah’s and Caesars brands compete directly with MGM’s regional ops, but Caesars’ heavier debt burden post-acquisition by Eldorado is a concern. MGM’s BetMGM holds a slight edge in iGaming.
• DraftKings (DKNG): DraftKings is a pure-play online sports betting and iGaming leader, competing with BetMGM in digital markets. Its tech-driven platform and aggressive marketing give it scale, but lack of physical assets makes it reliant on regulatory approvals. MGM’s omnichannel strategy offers cross-selling opportunities DraftKings can’t match.
• Melco Resorts & Entertainment (1928.HK): Melco is a Macau-centric competitor with high-end properties like City of Dreams. Its Studio City resort competes with MGM Cotai, but Melco’s lack of U.S. exposure makes it more vulnerable to Macau’s regulatory shifts. MGM’s diversified geographic footprint reduces this risk.