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Jerome García December 22, 2023 2 min read
Analysts Bullish on MGM, LVS, Penn, Caesars Stock in 2024
The two companies are among the top five choices for consumer discretionary stock ideas for 2024 in a list compiled by Citi Research
Stocks that rely heavily on economic conditions and business cycles are called consumer cyclicals. Such stocks can include companies operating within the retail, housing, automotive and entertainment industries. This includes major gambling operators.
According to a newly released report, Citi Research included two leading gaming and entertainment operators within its top choices for consumer discretionary stock ideas for 2024. Those companies are MGM Resorts International, as well as Las Vegas Sands. Citi noted that the choice to include the two leading gaming operators comes despite the usual concerns for casinos’ stock resilience.
Overall, Citi Research disclosed its best buy and sell ideas for next year, outlining companies within different industries across the globe. MGM, together with Las Vegas Sands were among the top five ideas for next year. Citi Research explained that it anticipates “fundamental resilience” for the two companies complemented by strong expectations for cash flow, earnings, margins and sales in 2024.
The company positioned Las Vegas Sands in third place within its top consumer cyclical ideas for next year, highlighting an expected return of 54%. On the other hand, MGM made it to the fourth place within the top five of Citi’s list with an expected total return of 44% in 2024.
Amid the ongoing senior-leadership change at Entain, the global gaming company, an expert analyst hinted at the possibility for the company to consider full or partial sale, or sale of assets to MGM. James Wheatcroft, a Jefferies analyst, recently outlined that Entain may consider selling its 50% BetMGM stake or even explore options for sale to MGM. The prediction comes after earlier this month, Entain’s CEO, Jette Nygaard-Andersen, announced her departure from the company.
Barclays Favors Caesars and PENN as Top Gaming Picks for 2024
Besides Las Vegas Sands and MGM, there are other companies within the gaming sector with lucrative stocks for 2024. Brandt Montour, an expert analyst with Barclays, recently highlighted PENN Entertainment as his favorite gaming stock for next year. He spoke about the company’s early success with the recent launch of ESPN Bet. The improved mobile sports betting app entered 17 US states in mid-November, attracting a wide range of consumers despite the competitiveness of the sports betting vertical.
Another gaming company favored by Montour is Caesars Entertainment. According to the expert, the company is another stock pick for 2024 considering its underappreciated deleveraging and sturdy free cash flow.