MGM Shorts Rebuild as UBS Cuts Target and Stock Slides

MGM Resorts International heads into the final stretch of September with a familiar tension: shorts are rebuilding, the Street is trimming targets, and the stock is down 11% over the past month — yet analysts still collectively see meaningful upside from current levels.

The short interest story is the clearest signal this week. Short interest climbed 9% over the past five trading sessions to 6.5% of free float — roughly 17.7 million shares. That reverses a sharp drop from August, when SI fell 26% over the month as the stock rallied. The rebuild has been fast: short positions were running near 24 million shares in mid-August before collapsing, and the past week's move suggests renewed conviction among bears as the stock retreated. Borrow conditions remain extremely loose, with availability at over 1,100% — more than eleven shares available for every one currently borrowed — meaning there is no friction preventing further short accumulation. Cost to borrow is negligible at 0.54%, up modestly on the week but barely registering as a cost of capital. The options market, by contrast, stays relatively calm. The put/call ratio of 0.66 sits just above its 20-day average of 0.65, with a z-score of just 0.77 — options traders are not rushing for downside protection.

The Street is more cautious than it was a month ago, but not bearish. The dominant move this week came from UBS analyst Robin Farley, who trimmed the price target to $46 from $50 while holding a Neutral rating — the most current signal from a bellwether firm. That cut follows a period of broad target increases: Macquarie and Argus both lifted targets in mid-August to $55, and JPMorgan raised to $53 in June. The mean price target of $50.41 implies roughly 29% upside from MGM's current $39.22, a gap that reflects lingering structural optimism even as near-term targets edge down. The bull case rests on EBITDAR up 31% year-over-year, 35% digital revenue growth, and group bookings pointing to 12% room-night growth in 2026. The bear case centers on Las Vegas Strip softness — non-luxury properties struggling on weekdays, ADR and occupancy under pressure, and management's downward revisions to EBITDAR estimates. On valuation, the stock trades at a P/E near 19.8x and EV/EBITDA of 8.6x, both of which have drifted lower over the past month in line with the price decline. The EPS surprise factor score ranks in the 92nd percentile — the company consistently beats estimates — but forward EPS momentum scores are weak, at the 21st percentile on a 30-day basis and just the 17th on a 90-day view.

The ownership picture adds one important dimension. IAC Inc. remains on the Schedule 13D register with a 26.1% stake — an activist position first disclosed in December 2025 — and there has been no change in their reported holdings as of the June 2026 filing. A 13D on the register at 26% of the company is a structural fact that limits how far the bear thesis can run: IAC's presence signals engagement at the board level, not passive indexing. Davis Selected Advisers holds a further 9.5% and added marginally in August. As always, 13D/G positions are disclosed around the 5% threshold and can change without a further filing.

After the last earnings print on July 29, the stock fell 1.2% the next day and drifted 3.7% lower over the following five sessions. The next event is scheduled for October 28 — six weeks away. Between now and then, the question is whether the short rebuild continues alongside the price decline, or whether the 29% implied upside in analyst targets starts to attract dip buyers willing to step in front of bears who are borrowing at near-zero cost.