Published on: October 22, 2025, 01:27h.
Updated on: October 22, 2025, 01:27h.
- Stock struggles this year amid Las Vegas and leverage apprehensions
- Analyst commends MGM for their decisions in New York and the Ohio casino sale
- MGM stock’s risk/reward profile appears favorable for potential gains, according to him
MGM Resorts International (NYSE: MGM) has experienced a decline of 5.21% year-to-date, in stark contrast to the S&P 500’s increase of 14.5%. Despite its current underperformance, the stock has the potential to turn around in 2026.
In a recent client report, Stifel analyst Steven Wieczynski recognizes that the operator of Cosmopolitan has faced pressure this year due to concerns about leverage and a decline in visitors to the Las Vegas Strip, where MGM holds the largest share. However, he suggests this stock could emerge as a leading candidate for recovery in 2026.
The prospect for 2026 is exceptionally favorable, and we consider the current risk/reward trade-off to be too promising to ignore; hence, investors should reevaluate the MGM narrative,” states the analyst.
Wieczynski reaffirmed a “buy” rating for the casino stock, while slightly lowering his price target to $47 from $50, indicating approximately 42% upside potential based on the closing price on October 21.
Market Holds ‘Severe Outlook’ for MGM Stock
Currently trading at about three times (excluding BetMGM and MGM China) the projected 2026 earnings before interest, taxes, depreciation, and amortization (EBITDA), it’s evident that MGM’s valuation is low. This may be attributed to market participants adopting what Wieczynski refers to as a “severe outlook” for the stock.
This pessimistic perspective partly stems from worries about operating leverage and concerns that the gaming company might be overly ambitious in its capital spending. Recently, MGM alleviated some of these worries by surprising both investors and the industry with its announcement to withdraw from the New York City casino competition.
On October 16, MGM took another positive step by selling the operating rights to MGM Northfield Park in Ohio to Clairvest Group for $546 million in cash, resulting in after-tax proceeds of $420 million and easing its long-term lease commitments with landlord VICI Properties (NYSE: VICI). Wieczynski praised both moves.
“We fully support this decision regarding New York, as we never identified a viable way to achieve an acceptable return on the roughly $2.3 billion MGM was poised to invest in that market due to the exorbitant tax rate and fierce competition (even before any actions from New Jersey),” the analyst added.
Concerning the Ohio casino sale, Wieczynski highlighted that the terms of that deal (a 6.5x multiple) suggest that MGM’s stock could be valued at $57, indicating a hopeful sign that MGM’s management is becoming more judicious with capital expenditures.
MGM Must Maintain Caution
Even though MGM stock is currently undervalued and the company has generated cash by divesting Northfield Park while avoiding the costly pursuit of a New York City license, it still needs to practice caution. In other words, investors likely prefer a focus on growth opportunities such as Japan, Macau, and premium regional casinos over extravagant acquisitions.
“Our concern would be that MGM might make an irrational move, such as acquiring the remaining stake in BetMGM or buying all of Entain, but we consider the likelihood of such an event very low at present, given that we believe MGM’s management recognizes that reducing leverage must be their top priority,” concludes the Stifel analyst.