Merrill locks the barn door after the horse is gone and cuts MGM Mirage (MGM) to UNDERPERFORM with a target of $24. Merrill cites 3 main factors for the late change of heart:
- increased uncertainty in the company’s ability to secure low cost financing for its CityCenter project (a 16,797,000 square feet mixed-use complex on 76 acres currently under construction by MGM on the Vegas strip)
- decreased visibility into 2H08 and 2009 demand trends (which are not looking on the up and up)
- reduced possibility that billionaire Kirk Kerkorian or Dubai World will buy the company
Merrill downgrades MGM Mirage (MGM) from Neutral to UNDERPERFORM, target cut from $52 to $24.