MGM Stock Volatility Could Increase Post-Caesars Takeover

Posted on: May 18, 2026, 09:14h. 

Last updated on: May 18, 2026, 09:14h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • If Caesars is acquired, MGM could become more volatile, says analyst
  • There’d be one less public option for investors to express views on the Las Vegas Strip
  • Rumored Caesars takeover price implies MGM, Penn are significantly undervalued

If Caesars Entertainment (NASDAQ: CZR) is acquired and taken private, that could lead to increased volatility for MGM Resorts International (NYSE: MGM) stock.

MGM’s Bellagio on the Las Vegas Strip. Shares of MGM could become more volatile if rival Caesars goes private. (Image: Instagram/@bellagio)

That’s the take of JPMorgan analyst Daniel Politzer who in a recent report to clients notes if Caesars goes private, as is expected if Tilman Fertitta acquires the company, there would be a dearth of publicly traded options through which investors could tap the Las Vegas Strip.

Further, one fewer publicly traded LV Strip resort operator could result in MGM becoming increasingly volatile, as public equity investors will have one fewer proxy to express their Las Vegas Strip views,” observes the analyst.

MGM and Caesars are the two largest Strip operators. Other publicly traded Strip operators include Apollo Global Management (NYSE: APO), which runs the Venetian, and Wynn Resorts (NASDAQ: WYNN). However, Apollo is a massive private equity company with an array of business interests while Wynn generates the bulk of its earnings before interest, taxes, depreciation and amortization (EBITDA) and revenue in Macau.

Good News for MGM Stock in a Caesars Takeover

In a potential Caesars go private transaction, there is some good news for MGM stock. Fertitta’s rumored offer in the low $30s per share appears to value Caesars at 7x enterprise value/ earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) with a 15% free cash flow (FCF) yield, according to Politzer.

The analyst says that implies MGM is worth $55+ per share, well above last Friday’s closing price around $37. That assessment jibes with previous suggesting MGM could be worth as much as $60 a share based on the purported Caesars takeover price.

There may be a silver lining for Penn Entertainment (NASDAQ: PENN), too. Based on the rumored takeover value of Caesars, Penn could be worth $25 to $30 a share, according to Politzer. The midpoint of that range, $27.50, implies significant upside from last Friday’s closing price of $16.20.

Penn is the largest operator of regional casinos, thus making for relevant comparisons with Caesars, which has an expansive regional portfolio of its own.

Speaking of Regional Casinos…

Assuming Fertitta is victorious in his quest for Caesars, the combined company will likely unload some assets in multiple markets, including Las Vegas, because Caesars and the buyer’s Golden Nugget overlap in several jurisdictions.

Some asset sales could be voluntary while others could be forced by state regulators, but for prospective buyers of regional gaming assets, the post-Caesars deal period could be an interesting time.

“For any regional gaming acquirer, the potential for forced divestitures could provide attractive acquisition opportunities,” concludes Politzer.