A "reasonably successful" CityCenter phased opening in Las Vegas and a potential Macau initial public offering are good news for MGM Mirage, but the need for more capital weighs on the casino operator, an analyst said Wednesday.
David Katz of Oppenheimer said in a client note that MGM Mirage's management anticipates CityCenter will report 2010 margins in the low 20 percent range, compared with his previous 12 percent estimate. Katz said the company's margin forecast could be optimistic, but he raised his estimate for CityCenter's earnings before interest, taxes, depreciation and amortization to $196 million from $136 million and increased the casino operator's price target to $9 from $8.
While management is upbeat on CityCenter's prospects, Katz feels the stock price already reflects this potential. He maintained a "Perform" rating.
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