Wednesday, September 26, 2007

MGM Mirage (Nasdaq:MGM) -- Actionable call alert!

- Jefferies is upping their tgt on MGM Mirage (NYSE:MGM) to $118 from $115 saying they believe the stock is currently currently undervalued as it is trading roughly 35% below price target. The company is one of Jeffco's top three picks as it continues to follow our projected blueprint, developing into much more than a gaming company.

While September numbers have yet to be released, they believe the recent opening of the Venetian has helped bring in more visitors and more revenue than originally anticipated and that the rest of the market is holding up much better than expected.

This oupled with a slight increase in Las Vegas estimates, they are raising '07 and '08 EPS and EBITDA estimates to $2.52 and $2.615bb from $2.45 and $2.584bb, and to $3.57 and $2.879bb from $3.42 and $2.841bb, respectively.

Jeffco's thesis on MGM remains bullish as MGM continues to turn into a diversified holding company, with its fingers into not only gaming but also high-end hotel management and joint venture land development. The latter two would bring cash into the company rather than use cash. To reiterate, they continue to believe their $118 price target is conservative and underestimates the true value of the company and the potential for its assets, mainly the value for the company's hospitality division and the potential for joint ventures on its 1,300+ acres of under/undeveloped land.

Notablecalls: Both Jeffco's 07/08 EPS and tgt are the new Street highs. Given how Jeffco's comments worked on Las Vegas Sands (NYSE:LVS) on Monday, I would not be surprised to see considerable buy interest in MGM following today's call.

I like chart as it looks like it's getting ready to push to a new all time high soon. It did reach a new high intraday but was chopped down. I think bulls will have another go today. As traders, I suggest you be on that train.

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