In bull markets, consumers spend money. It's human nature.
MGM Resorts has been capitalizing on this increase in consumer spending, and the market is rewarding it.
After reporting a double beat on Wednesday evening, the stock had its best earnings reaction since 2009 on Thursday.
It rallied 17.5% with a reaction score of 6.3. The reaction was sweet!
What's driving this strength?
First of all, the company reported a 94% occupancy rate for the month of January. This is a record.
Second, they're anticipating a resurgence in China, which has been their primary driver for growth in recent years.
Finally, MGM is a share cannibal. Since 2021, they have repurchased 40% of total outstanding shares.
This is one of the highest buyback rates in the entire market, and shareholders are loving it.
Let's talk about what else happened 👇
Here are the latest earnings reactions from the S&P 500:
*click the image to enlarge it
As you can see, MGM Resorts International had the best earnings reaction on Thursday, and West Pharmaceutical Services had the worst.
Cisco Systems was the largest company to report, but the earnings reaction was muted.
Now, let's dig into the data and talk about some of the best and worst earnings reactions 👇
MGM had its best earnings reaction since 2009:
MGM Resorts has been stuck in a sideways range since it peaked in 2021. It has been whipsaw galore.
This range could be resolved soon, with the most recent earnings reaction sparking some upside momentum.
If MGM is above 41.50, the path of least resistance will shift higher.
VTR had its best earnings reaction since 2020:
Ventas reported a double beat and rallied 8.3% with a reaction score of 4.6. It was a historic move.
Not only did the company smash this quarter's expectations, but it also issued better-than-expected 2025 guidance.
If and when VTR closes above 65, the path of least resistance will shift from sideways to higher. This will also mark the resolution of a multi-year accumulation pattern.
GEHC had its 2nd best earnings reaction ever:
GE HealthCare Technologies reported mixed results but rallied nearly 9% with a reaction score of 4.3. It was all about the guidance.
The company has a record backlog of $19.8B, and the book-to-bill ratio was 1.09x, the highest since the spin-off from General Electric (the conglomerate).
They have been expanding their profit margins, which is expected to continue for the foreseeable future.
If and when GEHC closes above 95, the path of least resistance will shift from sideways to higher. It would also mark a fresh all-time high and the resolution of a nearly 12-month accumulation pattern.
TYL had its 6th consecutive positive earnings reaction:
Tyler Technologies reported a double miss but rallied 6% with a reaction score of 3.3. The guidance was fantastic.
The company expects SaaS revenues to grow between 21% and 24% in 2025. This is much better than the market was expecting.
We expect TYL to continue trending higher for the foreseeable future.
MCO had its best earnings reaction since Q4 2022:
Moody's reported mixed results but rallied 4.4% with a reaction score of 2.3. The market loves how they are becoming more efficient.
The company has implemented an efficiency program, which is expected to generate annualized cost savings of $250M to $300M upon completion.
In addition, the management team issued upbeat guidance for 2025. The market was happy to hear it.
MCO is making a fresh leg higher above a key Fibonacci extension level. If it can stick the breakout, the path of least resistance is higher toward the 261.8% extension level.
ZBRA had its worst earnings reaction since Q3 2023:
Zebra Technologies beat its expectations but fell 8.4% with a reaction score of -7. The market hated their 2025 guidance.
The company is cautious about this year's performance because of global trade, geopolitical, and macroeconomic uncertainties.
They expect the tariffs from China and Mexico will negatively impact the bottom line.
As long as ZBRA is below 360, the path of least resistance is sideways.
WST had its worst earnings reaction ever:
West Pharmaceutical Services beat its expectations but fell 38.2% with a reaction score of -15.5. It was horrible.
The company is exiting its partnerships with Dexcom and Insulet, which have been a considerable share of total revenue. This news blindsided the market, and the stock was destroyed.
If WST is below 210, this is a valid top, and the path of least resistance is lower for the foreseeable future.
