MGM Growth Properties LLC (MGP) On The Radar Of Prospective Investors

MGM Growth Properties LLC (NYSE:MGP) has been upgraded by SunTrust, which now rates the stock as Buy versus Hold prior rating, according to a note issued on January 09. Analysts at Robert W. Baird, started covering the stock on January 04 with a Outperform rating. The stock lost favor of BofA/Merrill analysts who expressed their lack of confidence in it using a downgrade from Buy to Neutral on October 15. SunTrust, released new analyst coverage on October 02, calling the stock is Hold.

MGP stock dropped -0.91% in recent trade and currently has a stock-market value of $7.82B. The shares finished at $29.55, after trading as low as $29.36 earlier in the session. It hit an intraday high Thursday at $29.85. Trading activity significantly weakened as the volume at ready counter decreased to 798,664 shares versus 833,085 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 919,027 shares. The stock is now 15.88% above against its bear-market low of $25.5 on December 24, 2018. It has retreated -6.97% since it’s 52-week high of $31.61 reached in June. Now the market price is up 11.17% on the year and up 11.89% YTD.

Wall Street’s most bullish MGM Growth Properties LLC (NYSE:MGP) analysts are predicting the share price to blow past $37 per share during the next 12 months. The current median share price forecast by them is $33.5, suggesting that the stock could increase 13.37% in that time frame. The average price target of $33.32 calls for a nearly 12.76% increase in the stock price.

MGM Growth Properties LLC (MGP)’s 50 day simple moving average (SMA 50) price is $29.56 and its 200-day simple moving average (SMA 200) price is $29.38. The company’s stock currently has a total float of 264.48M shares. Its weekly volatility is hovering around 1.74% and felt 1.62% volatility in price over a month. On the upside, the share price will test short term resistance at around $29.81. On a downside, the stock is likely to find some support, which begins at $29.32. The failure to get near-term support could push it to $29.1.

When looking at valuations, MGM Growth Properties LLC (MGP) has a cheap P/E of 31.37x as compared to industry average of 43.98x. Moreover, it trades for 26.96 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 1.34x price/book and 7.8x price/sales. Compared to others, MGM Growth Properties LLC is in a different league with regards to profitability, having net margins of 6.7%. To put some perspective around this, the industry’s average net margin is 36.4%. MGP’s ROE is 4.2%, which is also considerably worse than the industry’s ROE of 14.6%.

MGP last reported earnings that receded expectations. The company raked in $0.26 per share, -60.61% change on the same period last year. That was worse than consensus for $0.26. Revenue for the recent quarter stood at $283.99 million, up 32% on last year and above the $277.3 million predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $259 million to $313.4 million, which should be compared with $215.32 million generated last year. EPS is seen in a range of $0.23 to $0.27, against the $0.25 reported a year ago.