Published: October 9, 2023, 03:00h. 

Last updated: October 8, 2023, 11:20h.

The recent cyberattack on MGM Resorts International (NYSE: MGM) is expected to have minimal impact on the casino operator’s stock price, with the financial fallout mostly limited to the third quarter. Macquarie analyst Chad Beynon stated that the effects of the ransomware infiltration in September will not significantly affect the current quarter. Beynon maintains an “outperform” rating and a $60 price target for MGM.

MGM recently revealed that the cyberattack will result in a $100 million reduction in earnings before interests, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) for the third quarter. This figure does not include approximately $10 million in one-off expenses related to the breach. Despite the impact on earnings and operational disruptions, MGM expects its cybersecurity insurance to cover the financial losses and believes that the issue is contained.

While MGM appears to be on solid footing after the attack, there is potential for reputational risk as sensitive data, including Social Security and passport numbers, was accessed by the hackers. Some cybersecurity organizations had expressed concerns about MGM’s defense systems prior to the attack. Analyst Chad Beynon suggests that MGM’s rivals, such as Caesars, Wynn Resorts, and Golden Entertainment, may gain market share in the third and fourth quarters.

“Overall, we believe that MGM has managed the situation well, but may lose some market share to its competitors in the near term,” concluded Beynon.