MGM Resorts CFO, analysts upbeat on Japan

At a Deutsche Bank conference Tuesday (24 September), MGM’s Jonathan Halkyard called Japan “the single best development opportunity in gaming.” MGM is building the nation’s only integrated resort.

Location, location, location

Halkyard talked about Osaka at Deutsche Bank’s 32nd Annual Leveraged Finance Conference in New York. “It’s a massive market, with 30 million people within a three-hour rail trip,” he said. “It’s also an area that’s closer to northern China, Beijing and Shanghai than is Macau.”

In a 2023 analysis, CBRE’s John DeCree said the development could outpace Singapore’s two casinos for gross gaming revenue (GGR). By one estimate, the IR, on Yumeshima Island in Osaka Bay, will generate ¥463bn in GGR per year, and ¥520bn in total revenue.

DeCree cited another big advantage. With no other competition in Japan, MGM “could be the only game in town for a period of time.”

Analysts give thumbs-up
Industry analysts share that enthusiasm. In a 16 September report, Jeffries analyst David Katz maintained a buy rating on MGM.

He noted that “corporate insider sentiment is positive”—always a good sign. Last month, Halkyard bought 10,000 shares of MGM stock for $340K. And President and CEO Bill Hornbuckle recently bought almost $2m worth of shares.

According to financial blog Insider Monkey, MGM Resorts “is one of the best undervalued cyclical stocks … generating greater profits than its primary rivals. … The eventual launch of its casino in Japan (is) expected to benefit the stock in the long run.”

Based on overall performance, BTIG analyst Clark Lampen reaffirmed his buy on MGM, as did JMP Securities.

Potential for delays
Recently, organisers of the 2025 World Expo, to be held near the MGM site, asked that construction be delayed for the duration of the six-month event. That could delay MGM’s target opening date in the fall of 2030 and also drive up costs.

But Halkyard says the expo is beneficial for MGM Osaka. “It provides some of the infrastructure that will be important for our integrated resort, in terms of transportation and site improvements.”