Analyst Trusts MGM Resorts Shares to Hit $69 despite Recent Cyberattack

Several weeks ago, the casino giant MGM Resorts suffered a devastating cyberattack that forced it to shut down multiple systems. In the wake of the attack, the company was warned that its credit score might be lowered while its stock plummeted. Equity analyst David Katz, however, is optimistic that the casino juggernaut will make a quick recovery.

According to Katz, the casino and hospitality company’s stock, trading for $36.93 as of the time of this writing, is likely to rebound to $69 in the near future.

Katz told investors that the cyberattack is a singular event that is unlikely to affect MGM’s business in the long term. While the attack is certainly going to impact the casino company’s Q3 and probably Q4 results, much of the impact is likely to be covered by insurance, leaving the 2024-2025 time frame intact.

Katz has decreased his estimates for MGM Resorts’ Fiscal Year 2023 results. Previously projecting $15.461 billion in revenue and $4.642 billion in adjusted cash flow, the analyst now projects $15.251 billion in revenue and $4.51 in adjusted cash flow.

MGM Is Poised for Quick Recovery

Commenting on the attack, Katz said that it was the result of a single human error. In any case, the attack, which was part of a larger operation affecting several companies, presents a “set of issues on how companies deploy resources to mitigate risk,” Katz added.

In addition, he pointed out that the presence of insurance provides MGM with a lifeline that will likely prevent a lingering impact on its shares. The upcoming Formula One Las Vegas Grand Prix and Super Bowl game in Las Vegas will likely make up for much of MGM’s losses, Katz predicted.

Katz concluded that MGM Resorts is poised for success in Las Vegas and is already recovering in Macau, sparking optimism about future trading.

In other cyberattack-related news, MGM Resorts recently contacted its loyalty members, promising them that their loyalty will be rewarded “to the fullest and more.” The company asked its customers to remain patient and be on the lookout for further announcements.

Despite MGM’s best efforts to make things right, certain MGM players launched lawsuits against the company because their data got compromised. Affected Caesars Entertainment customers launched similar lawsuits.

Speaking of Caesars, the MGM competitor recently offered two years of IDX services to its loyalty program members whose data got compromised.