Deutsche Bank issued a report on MGM Resorts International (NYSE: MGM) after analysts noted that shares may be undervalued. The firm rates MGM Resorts as a Buy with a $28 price target.

Analyst Carlo Santarelli wrote, "We conclude that shares are currently trading at what we would deem bear case SOTP multiples and we believe the relative strength of the story / fundamentals will expand the currently inexpensive valuation over time. Accordingly, given accelerating top line trends and ramping margins, as well as a favorable geographic mix and an unintimidating valuation, we are reaffirming our Buy rating and $28 PT."

Analysts at Deutsche Bank gave two reasons why they believe MGM may be undervalued:

1. Earnings growth

Deutsche Bank noted that MGM may have the opportunity to expand its earnings multiple due to increases in resort fees in MGM properties and high rates of occupancy, with the Las Vegas Strip enjoying occupancy rates approaching 90 percent over the past year.

2. Geographic mix

Analysts at Deutsche Bank believe that MGM has the potential to Outperform peers such as Las Vegas Sands Corp. (NYSE: LVS) and Wynn Resorts, Limited (NASDAQ: WYNN) due to the diversification of its resort portfolio and strong domestic earnings growth performance.

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