Analysts Optimistic about MGM, LVS, Penn, and Caesars Stocks in 2024

Consumer cyclicals, which are stocks influenced by economic conditions and business cycles, encompass a wide range of industries, including retail, housing, automotive, and entertainment. Among these, major gambling operators play a significant role.

Citi Research recently unveiled its top consumer discretionary stock ideas for 2024, and to the surprise of many, it featured two prominent gaming and entertainment companies: MGM Resorts International and Las Vegas Sands. This inclusion came despite the usual concerns regarding the resilience of casino stocks.

Citi Research expressed confidence in the fundamental strength of both companies, predicting robust cash flow, earnings, margins, and sales in 2024. Las Vegas Sands secured the third spot on their list, with an expected return of 54%, while MGM claimed the fourth position, anticipating a total return of 44% in 2024.

Amid leadership changes at Entain, a global gaming company, industry experts speculate about the potential for the company to consider selling assets to MGM. Jefferies analyst James Wheatcroft suggested that Entain might explore options for selling its 50% BetMGM stake or even consider a full or partial sale. This prediction follows the recent announcement of Entain's CEO, Jette Nygaard-Andersen, stepping down from her position.

Aside from MGM and Las Vegas Sands, other gaming companies are also poised for success in 2024. Analyst Brandt Montour from Barclays named PENN Entertainment as his top gaming stock for the coming year. He highlighted the company's early success with the ESPN Bet mobile sports betting app, which rapidly expanded to 17 US states in mid-November, attracting a diverse range of consumers.

Caesars Entertainment is another gaming company favored by Montour for 2024. He emphasized the company's underappreciated deleveraging efforts and strong free cash flow, making it an attractive choice for investors.

In conclusion, 2024 appears promising for several gaming and entertainment companies, according to analysts, as they anticipate robust financial performances and potential strategic moves within the industry.