Goldman Sachs said free-cash-flow generation could ding MGM's valuation
Shares of MGM Resorts International (NYSE:MGM) are down 1.5% to trade at $37.04 at last check, after Goldman Sachs coverage initiated coverage with a "sell" rating and $34 price target. The analyst in question noted the company's free-cash-flow generation could ding both capital returns and valuation.
MGM shed 15% in the last 12 months, but still maintains a 5.2% lead for 2025, with support from the 20-day moving average. The security is fresh off its third-straight weekly gain that finally cleared its 200-day moving average, a trendline that capped rallies in May and was last toppled in February.
The equity's 10-day call/put volume ratio of 6.76 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than 94% of annual readings. An unwinding of this optimism may pressure MGM Resorts International stock even lower.
Premium is affordably priced, per MGM's Schaeffer's Volatility Index (SVI) of 33% that sits in the 10th percentile of its annual range, implying options players are pricing in lower-than-usual volatility expectations. Its Schaeffer's Volatility Scorecard (SVS) of 83 out of 100 is also worth noting, as it suggests the stock tended to exceed those volatility expectations in the past year.