MGM Stock Tumbles After CEO Departure

The news is attracting analysts' attention

Digital Content Manager
Feb 13, 2020 at 9:21 AM
facebook twitter linkedin


The shares of MGM Resorts International (NYSE:MGM) are running lower this morning, just one day after news broke that the firm's CEO Jim Murren has decided to step down. The casino company's board also withdrew its full-year forecast for the time being, blaming coronavirus anxieties, though Murren added that he believes the economic effects of the deadly virus will only be in the near term. MGM is down 2.9% before the open at last check. 

The news has attracted analysts' attention, with Deutsche Bank lifting it target price to $35 from $34, putting the 12-month consensus target price at $35.75, which is a 6.2% premium to last night's close. Meanwhile, the brokerage bunch is still exercising caution around the casino name, with seven in coverage calling it a "hold" or worse, compared to only four calling it a "strong buy."

Sentiment in the options pits has also been bearish. In the last 10 weeks, 1.19 puts were bought for every call at the the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than 95% of all other readings from the past 12 months, suggesting a bigger-than-usual appetite for long puts of late. 

This dip has MGM on pace to snap its three-day win streak and erase its weekly gains entirely. It also has the equity testing the 100-day moving average once again, which has provided support on the chart since its late-January tumble off its one-year peak of $34.67. 

 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 


 


 
Special Offers from Schaeffer's Trading Partners