Las Vegas GGR Rises, Caesars and MGM Draw Bullish Praise

Date Posted: December 29, 2023, 05:08h.

Last Updated: December 29, 2023, 05:08h.

With the Las Vegas Strip thriving, Caesars Entertainment (NASDAQ: CZR) and MGM Resorts International (NYSE: MGM) are considered potential winning equity picks for investors in 2024.

Las Vegas Strip Nevada gaming revenue GGR
People take pictures in front of the “Welcome to Fabulous Las Vegas” sign. An analyst is bullish on shares of Strip operators Caesars and MGM. (Image: Getty)

The reasons for this are explained by Macquarie analyst Chad Beynon, who has reiterated “outperform” ratings for both MGM and Caesars, the two biggest Strip operators. His price targets for Caesars and MGM suggest potential upside of 30% and 29% respectively. This recommendation comes following a successful November for Nevada casinos, indicating a strong start for GGR and RevPAR for Strip operators.

The Vegas Strip generated record revenue of $821m in November (+23% year-over-year), driven by strong table revenue (+62% year-over-year) which we attribute to higher end customers drawn to Vegas for F1 weekend and the Sphere,” wrote Beynon.

This positive forecast for Caesars and MGM comes ahead of New Year’s Eve celebrations, which are expected to draw over 400,000 visitors to Las Vegas. This potential record-breaking start to the new year has raised the profile of these stocks.

Caesars, MGM Could Be 2024 Winners

In 2023, both Caesars and MGM saw stock increases, with the Flamingo operator rising 12.69% and the Bellagio operator rising 33.25%. Beynon adds that Strip operators still have room for growth, particularly due to continued events like Formula One races and future moves in professional sports, among other factors.

MGM’s stock saw a 13.31% increase over the past month alone, surpassing the S&P 500’s performance. Beynon outlined potential catalysts for Caesars to outperform in 2024 as well. The Linq operator has opportunities for improvement, particularly in the digital gaming sector, which could lead to more efficient operations and profitability.

Looking ahead, the expansion of recurring events in Vegas will continue to drive growth in the GGR, particularly in 2024 and beyond. Events like Formula One and the Sphere, in addition to potential newcomers like Major League Baseball, will bring more revenue to the area and continue the growth trend. These developments also bode well for 2024, especially with major events like Super Bowl LVIII set to attract high-end customers.

Other Ideas Among Las Vegas Strip Stocks

Aside from Caesars and MGM, other notable gaming companies with Strip exposure include Wynn Resorts (NASDAQ: WYNN) and Golden Entertainment (NASDAQ: GDEN). Beynon classified Wynn as “neutral,” noting its heavy exposure in Macau and a modest 10.48% increase in stock performance over the year. This position implies notable upside for Wynn in 2024. The analyst also holds an “outperform” rating for Golden Entertainment, forecasting potential upside of 29%.

The Las Vegas-based Golden Entertainment holds various revenue streams through its diverse operations, including two Arizona Charlie’s casinos and PT’s Pubs in the Las Vegas Valley.

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