The leading gaming, hospitality and entertainment giant, MGM Resorts International, became a victim of a cyberattack back in September. At the time, the operator confirmed issues with bookings, hotel electronic doors, some slot machines, as well as other amenities. After the initial attack, MGM was able to recover and resume its operations while at the same time rejecting the option to pay ransom.

The cyberattack impacted MGM’s performance, resulting in a dip in its shares. Currently, the company’s stock trades in the $36 range. However, one analyst predicted a rebound and remained optimistic about MGM’s future performance, despite the devastating attack. As announced by CDC Gaming Reports, Carlo Santarelli, an analyst for Deutsche Bank, remains optimistic about MGM, explaining that the cyberattack only briefly impacted the company’s performance.

Speaking about the current stock, the analyst said it is “very cheap.” Yet, Deutsche Bank’s assessment of MGM’s target price stock remains high, decreasing slightly from $57 to $56. This assessment comes ahead of the release of the operator’s third quarter results which are expected on November 8, 2023, and takes into consideration the recent cyberattack.

Earlier this month, MGM confirmed it expects the impact of the cybersecurity issue to be reflected in its Q3 2023 earnings. At the time, the company estimated a reduction of approximately $100 million in adjusted EBITDAR for September. With that in mind, Santarelli explained: “The impact from one-time expenses related to the breach is expected to be less than $10 million in the third quarter, and we do not believe these expenses will be reflected in adjusted EBITDAR, as they are expected to be covered by insurance.”

Impact of Cyberattack Evident in September’s Results

The analyst spoke about the impact of the cyberattack on the third quarter results. Still, Santarelli said that the results in September were primarily impacted by the cyberattack but figures from July and August remained “essentially flat.”

While MGM’s performance was impacted last month with occupancy decreasing to 88%, lower than the 93% recorded for the corresponding period in 2022, performance this month is expected to be nearly on par. MGM is expected to report occupancy for October of 93%, slightly below the October 2022 result of 94%.

“The deceleration in the third quarter, however, was largely a result of September performance and we believe primarily relates to the cyber-security incident, as well as the reporting of GGR related to the incident.“

Carlo Santarelli, analyst for Deutsche Bank

Recently, another analyst predicted that MGM will quickly recover from the cyberattack. David Katz, an equity analyst predicted that the company’s stock is likely to rebound in the near future, hitting $69. Moreover, he explained that the cybersecurity issue isn’t likely to impact the business in the long term.

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Deutsche Bank analyst Carlo Santarelli has defied expectations for the casino resorts sector, posting an upbeat outlook for Wynn Resorts. According to Santarelli, Wynn’s shares will soar.

Wynn Resorts Is Gathering Financial Momentum

He bases this outlook on several main factors that are going to drive an upsurge in the company’s stock over the next months. One of those is the return of travelers in Macau, which will help Wynn’s overseas operations.

At the same time, footfall has been picking up on the Las Vegas Strip, and the company is already building its Al-Marjan Island in the United Arab Emirates (UAE), the very first casino resort in the country, which should yield fantastic dividends in the long run.

With Al-Marjan Island’s construction getting underway last week, investors are still hesitant about the share value of the company, which means that the stock is presently underappreciated and bound to pick up in the next months.

Santarelli argues that Al-Marjan Island will be driving strong returns for the company. About 90% of the UAE’s population of 10 million people are expatriates and can therefore gamble. Of course, the project is leaning in heavily on tourism as well and will be a global destination for not just gambling, but also meetings in the Middle East.

Another reason for optimism in the long term is that the tax structure of the UAE is very generous – only 13%. In the meantime, Wynn is also working with a real estate developer in New York City, Related Cos. This investment, though, may not pay off immediately.

The newly-planed venue at the Hudson Yards is probably going to take a long while before it sees a payoff, but this doesn’t mean it would fail to. Wynn is expected to get a 15% return on investment if the project is finally approved – and if the project is approved. The three downstate permits for new casinos have not yet been issued in the Empire State.

WynnBET Still Meaningful Driver of Value

Meanwhile, WynnBET, the most omnipresent asset of the company is not going to be one of the company’s strongest. The interactive division is indeed a bit slower, but it’s not out of the picture at all. Just the opposite, Santarelli has called the asset a “meaningful driver of value.”

WynnBET has been very fast to cut its losses, and even though it posted a loss of $99 million in 2022, it’s doing way better than competitors who posted triple-digit losses.

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