Bullish catalysts for MGM Resorts

Recent commentary on MGM Resorts International (MGM) outlines a bullish case built around the company’s cash generation and capital return strategy. As of February 11, MGM shares were trading at $36.36, with a trailing P/E of 49.16 and a forward P/E of 17.83, according to Yahoo Finance. The company, which operates gaming and entertainment assets in the United States, China, and internationally, is highlighted as presenting multiple near and long term catalysts.

A central pillar of the thesis is MGM’s ability to generate a 14.2% Owner Earnings yield, which is being used to support aggressive share repurchases. The company is described as buying back 7% to 8% of its shares annually, with these repurchases seen as a key driver of potential shareholder value at current valuation levels of roughly 7 times Owner Earnings.

BetMGM, the 50/50 digital sports betting and iGaming joint venture, is cited as a major recent milestone after turning profitable in 2025. In that year, BetMGM distributed $100 million to MGM, and expectations in the thesis call for $125 million to $200 million in cash distributions in 2026. These inflows are viewed as directly supporting further buybacks and strengthening Owner Earnings.

Within MGM’s domestic operations, the company is managing through a temporary slowdown in Las Vegas tourism and room remodels at the MGM Grand in 2025. The thesis argues that as these remodels are completed, conventions return, and revenue per available room growth resumes, operations on the Las Vegas Strip should stabilize, contributing to improved financial performance.

Another near term catalyst identified is the planned sale of Northfield Park, expected to close in the first half of 2026. The transaction is projected to deliver $420 million in proceeds, which are intended to be used for share repurchases. This is presented as an incremental boost to the company’s capital return program.

MGM China’s ongoing recovery is also emphasized, with the business expected to generate $200 million to $300 million in annual dividends to the parent company. These dividends are described as an additional funding source for capital returns, complementing cash flows from U.S. operations and BetMGM.

Beyond the near term, the thesis points to MGM’s integrated resort project in Osaka, Japan, scheduled to open in 2030. MGM holds a 42.5% stake in the project, which is projected to contribute $350 million to $450 million in annual Owner Earnings once operational. The Osaka resort is described as benefiting from monopoly positioning and a lower tax rate relative to Macau.

On the earnings front, GAAP net income is expected in the thesis to swing from a loss to a profit in 2026 as one time charges abate. This anticipated shift is seen as a potential catalyst for increased investor attention. The commentary notes that MGM’s stock has risen about 38.25% since a prior bullish thesis in April 2025 that highlighted its asset light transition, brand strength, real estate moat, disciplined buybacks, and resilient cash flows.

The latest bullish analysis, attributed to Maxx Waring on The Rational Investor’s Substack, reiterates a target to buy MGM shares up to $46. This view underscores the combination of stabilized core operations, growing digital cash flows, and Osaka’s long term potential as key supports for the risk reward profile.

Despite the positive thesis, MGM Resorts International (MGM) is noted as not being on a list of the 30 most popular stocks among hedge funds. Data cited show 52 hedge fund portfolios holding MGM at the end of the third quarter, down from 58 in the previous quarter. The article presenting this thesis also indicates a separate preference for certain AI stocks, which it characterizes as having greater perceived return potential over a shorter time frame.