MGM Resorts International announced Thursday it will buy back $2 billion of its own shares as earnings are set to spike with the opening of new casinos.
The repurchase program is equivalent to about 10 percent of the company’s market value based on today’s stock price. MGM did not give a specific time period to complete the buyback.
MGM is finishing a multi-year, $6 billion investment cycle that includes the construction of three new casinos and the rebranding of a major Las Vegas property.
The casino operator opened MGM National Harbor outside D.C. in Dec. 2016, MGM Cotai in China in February and plans to open MGM Springfield in Massachusetts in August. The company is also completing a $550 million upgrade of the former Monte Carlo.
Those projects will help boost revenue as much as 34 percent to $14.5 billion by 2020, the company said in a presentation on Thursday. Adjusted cash flow is forecast to grow as much as 39 percent to $3.9 billion by 2020.
That will leave the company with a total of $5 billion in free cash flow over the next three years that it will utilize to buy back shares, pay dividends, reduce debt, buy assets, and expand into new regions like Japan.
MGM said acquisitions could include online or sports betting companies.
MGM’s new stock repurchase program comes two weeks after the company cut its 2018 earnings forecast, sending shares tumbling more than 10 percent.
The company also said Thursday it recently completed its $1 billion share repurchase program announced in Sept. 2017.
Shares of MGM fell 87 cents, or 2.6 percent, after hours to $32.50, valuing the company at about $18.2 billion.