Sure! Here’s the rephrased version:
Published on: May 18, 2026, 09:14h.
Updated on: May 18, 2026, 09:14h.
- Analyst Suggests MGM Stock May Face Increased Volatility If Caesars Is Acquired
- Less Public Investment Opportunities Available on the Las Vegas Strip
- Caesars Acquisition Price Suggests MGM and Penn’s Stocks Are Undervalued
If Caesars Entertainment (NASDAQ: CZR) is taken private, it may lead to heightened fluctuations in MGM Resorts International (NYSE: MGM) stock prices.
This perspective comes from JPMorgan analyst Daniel Politzer, who indicated in a recent client report that should Caesars be privatized, as anticipated with Tilman Fertitta’s prospective acquisition, there would be fewer public investment avenues on the Las Vegas Strip.
Moreover, having one less publicly traded operator on the LV Strip could lead to a rise in MGM’s volatility, as public equity investors will have diminished options to express their views regarding the Las Vegas Strip,” observes the analyst.
MGM and Caesars represent the two largest operators on the Strip. Other publicly traded entities include Apollo Global Management (NYSE: APO), which oversees the Venetian, and Wynn Resorts (NASDAQ: WYNN). However, Apollo is a sprawling private equity firm engaging in various business ventures, while Wynn primarily earns its revenue in Macau.
Positive Outlook for MGM Shares in Case of Caesars Acquisition
In the event of a Caesars acquisition, there is encouraging news for MGM’s stock. Fertitta’s rumored offer in the low $30s per share suggests a valuation of Caesars at 7x enterprise value/earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR), coupled with a 15% free cash flow (FCF) yield, according to Politzer.
This valuation indicates MGM could be worth over $55 per share, significantly higher than last Friday’s closing around $37. This aligns with previous estimates that MGM could reach a value of up to $60 per share based on the expected Caesars acquisition cost.
There’s also potential good news for Penn Entertainment (NASDAQ: PENN). Based on the hypothesized Caesars acquisition price, Penn could be valued between $25 and $30 a share, according to Politzer. The midpoint of this range, $27.50, represents considerable upside compared to Friday’s closing price of $16.20.
Penn stands as the largest regional casino operator, making it a relevant peer to Caesars, which also holds an extensive regional casino presence.
On the Topic of Regional Casinos…
Should Fertitta succeed in acquiring Caesars, the new entity may need to offload various assets in several markets, including Las Vegas, due to overlapping locations with the Golden Nugget.
While certain asset sales may be voluntary, others could be mandated by state regulators, creating intriguing opportunities for regional gaming buyers in the post-Caesars acquisition landscape.
“For any regional gaming acquirer, the likelihood of enforced divestitures could create appealing acquisition proposals,” Politzer concludes.