MGM Stock Tumbles After Barry Diller’s People Scraps Takeover Bid – Mizuho Says Withdrawal Was ‘Not Terribly Surprising’

• BofA flagged potential near-term pressure across MGM's Las Vegas, Macau and digital operations, while Mizuho said future projects are not reflected in the shares.
• StoneX lowered PPLI's price target to $63 from $70 while keeping a 'Buy' rating, Fly reported.
• MGM said it will continue as a standalone company, citing its Las Vegas and regional properties, BetMGM, MGM China and the Osaka opportunity.

MGM Resorts International (MGM) was in focus Thursday as analysts weighed in on the casino operator after Barry Diller’s People Incorporated’s (PPLI) withdrawal of its proposal to acquire the company’s remaining public shares. 

According to a note to investors cited by TheFly, Bank of America (BofA) resumed coverage of MGM with a ‘Neutral' rating, while Mizuho lowered its price target but maintained an ‘Outperform’ rating.

MGM shares were down 9% at the time of writing, while PPLI shares were trading around 3% higher on Thursday.

BofA Flags Near-Term Operating Pressure

BofA resumed coverage of MGM with a $40 price target and a 'Neutral' rating, according to The Fly. The analyst previously had ‘No Rating’ on the shares.

BofA said People’s proposal had highlighted potentially undervalued assets within MGM. However, the analyst expects core trends in Las Vegas, Macau and digital to remain pressured in the near term.

Mizuho Keeps Outperform Despite Target Cut

Mizuho lowered its price target on MGM to $55 from $60 while maintaining an 'Outperform' rating, according to The Fly.

The analyst said the withdrawal was “not terribly surprising,” noting that the roughly $48 per share offer was unlikely to entice MGM’s board. Mizuho also believed MGM’s future projects are not reflected in the shares.

What Changes For MGM After The Withdrawal

People had proposed in June to acquire the MGM shares it did not already own for $48.30 per share in cash. At the time of the withdrawal, People held about a 27% stake in MGM.

With the proposal withdrawn, MGM said it will continue as a standalone company. The company pointed to its Las Vegas and regional properties, BetMGM, MGM China and the development opportunity in Osaka as part of its standalone strategy.

StoneX Reassesses People Inc.

The analyst reaction also extended to People Inc. StoneX lowered its price target on PPLI to $63 from $70 while maintaining a 'Buy' rating, according to The Fly.

StoneX said it would have preferred to see People complete the MGM transaction because it believed a deal could have accelerated the realization of People’s valuation discount. However, the analyst said the added clarity following the withdrawal gives the stock a chance to refocus on that valuation gap.

Retail View On MGM, PPLI

Retail sentiment on Stocktwits for MGM remained in 'bullish' territory with 'high' message volume over the past 24 hours. For PPLI, sentiment trended in the 'neutral' zone, while message volume was at 'extremely high' levels.

MGM shares are down nearly 9% year to date, while PPLI shares have declined nearly 8% over the same period.

Also read: GoDaddy Shares Surge On Gen Digital's Reported Takeover Bid — GEN Stock Falls As Talks in Early Stages

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