Hospitality and entertainment company MGM Resorts International (MGM) has announced that it has been selected by Japanese city Osaka as its integrated resort partner. MGM Japan and its joint venture partner ORIX will develop the project.
Following the news, shares of the company declined marginally on Tuesday. The stock, however, pared its losses slightly to close at $45.06 in extended trade.
The project entails an investment of $10 billion and has been designed to develop Osaka as one of the prominent entertainment and hospitality destinations that will serve as a hub for tourism across Japan. Integrated resort licenses are expected to be issued by the central government in 2022.
The project is proposed to be located along the water on Osaka’s Yumeshima island and will offer almost 2,500 hotel rooms, approximately 400,000 square feet of conference facilities and 330,000 square feet of exhibition space, among others.
The CEO of MGM Resorts, Bill Hornbuckle, said, “It is an honor to be selected as Osaka’s partner in developing an integrated resort. We will work closely with prefectural/city municipal governments to deliver an iconic, uniquely Japanese destination warranting Osaka’s selection as home to one of Japan’s first integrated resorts.” (See MGM Resorts stock chart on TipRanks)
Recently, Bernstein analyst Vitaly Umansky upgraded the stock to Buy from Hold with a price target of $58.90. The analyst’s price target implies upside potential of 31.2% from current levels.
Consensus among analysts is a Strong Buy based on 4 Buys and 1 Hold. The average MGM Resorts price target of $53.38 implies upside potential of 18.9% from current levels.
MGM Resorts scores a 9 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained 106.6% over the past year.
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