Analysts are Raising Price Targets of These 5 Stocks

3. MGM Resorts International (NYSE:MGM)

Number of Hedge Fund Holders: 59 

MGM Resorts International (NYSE:MGM) is a Nevada-based firm that owns and operates casino, entertainment, and hotel resorts. It is ranked third on our list of 10 stocks that analysts are raising price targets of.

On September 28, investment advisory Bank of America maintained a Neutral rating on MGM Resorts International (NYSE:MGM) stock but raised the price target to $48 from $46, noting that a new acquisition would act as double-digit accretive for the free cash flow of the firm.

At the end of the second quarter of 2021, 59 hedge funds in the database of Insider Monkey held stakes worth $2.8 billion in MGM Resorts International (NYSE:MGM), up from 57 in the preceding quarter worth $2.7 billion. 

In its Q2 2021 investor letter, Oakmark Funds, an asset management firm, highlighted a few stocks and MGM Resorts International (NYSE:MGM) was one of them. Here is what the fund said:

“We originally established our position in MGM during 2016. At that time, we believed its valuation did not reflect the improving fundamentals of the Las Vegas Strip, which was recovering from years of overbuilding. The market had also failed to recognize the quality of MGM’s assets and its potential to dramatically reduce a bloated cost structure. A long history of private market transaction activity further supported our view that the stock was materially undervalued. However, choppy execution by former management and a profit growth plan that failed to live up to expectations made this a bumpy (yet rewarding!) investment for Oakmark. Perhaps the biggest surprise relative to our initial thesis is the momentum and excitement surrounding the online sports gambling market. The company’s BetMGM platform has quickly staked the third-largest market position in online sports betting with plans to capture up to 25% of this $30+ billion market, which continues to grow rapidly. The exuberance surrounding digital gaming, coupled with expectations for a strong post-pandemic recovery in Las Vegas, has lifted the stock price to our estimate of intrinsic value. Therefore, we sold our shares in favor of more attractively priced alternatives.”