{"id":172708,"date":"2021-05-05T08:13:58","date_gmt":"2021-05-05T15:13:58","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=172708"},"modified":"2021-07-06T04:26:58","modified_gmt":"2021-07-06T11:26:58","slug":"caesars-stock-rallies-as-vegas-bookings-margins-surge","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/caesars-stock-rallies-as-vegas-bookings-margins-surge\/","title":{"rendered":"Caesars Stock Soars on Vegas Recovery, Analysts Rush to Boost Price Targets"},"content":{"rendered":"

Caesars Entertainment (NASDAQ:CZR) stock is higher by six percent in early trading Wednesday, a day after the gaming company delivered a blistering first-quarter earnings report — one including commentary that Las Vegas is roaring back to life.<\/p>\n

\"Caesars
The lobby of Caesars Palace Las Vegas. Caesars stock is soaring thanks to a strong profit outlook. (Image: Business Insider<\/em>)<\/figcaption><\/figure>\n

The Paris operator notched earnings before interest, taxes, depreciation and amortization (EBITDA) of $505 million in the January through March period. That’s while noting its Las Vegas properties are sold out on weekends for the \u201cforeseeable future,\u201d according to CEO Tom Reeg. On a call with analysts, executives also highlighted debt reduction and cash flow generation targets, much to Wall Street’s delight.<\/p>\n

With Caesars targeting debt cuts of $2 billion over the next year and free cash flow (FCF) estimates ahead of Wall Street expectations, at least three analysts lifted price targets on the name today. That group includes Stifel’s Steven Wieczynski who boosts his 12-month price forecast on the Harrah’s operator to $125 from $110.<\/p>\n

Seems like just yesterday we had investors questioning CZR\u2019s ‘guidance’ of 40 percent margins and $10\/share in FCF. At this point we believe both of those targets will not only be met over the long-term, but we believe there is considerable upside to both,\u201d he said in a note to clients.<\/span><\/p><\/blockquote>\n

On Tuesday’s post-earnings conference call, Reeg said it’s likely the company generates $1 billion<\/a> in EBITDA in at least one quarter this year while revealing an impressive 2022 <\/span>earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (<\/span><\/span>EBITDAR) expectation.<\/span><\/p>\n

\u201cCZR indicated they would be disappointed if they didn\u2019t do at least $4B in EBITDAR in 2022. Are you kidding me? We were previously forecasting $3.7B in EBITDA in 2023!!??,\u201d said Wieczynski.<\/span><\/strong><\/p>\n

Caesars Stock Becoming Debt Reduction Story, Too<\/span><\/h2>\n

It’s been less than a year since Eldorado Resorts purchased \u201cold Caesars,\u201d creating the largest domestic casino operator<\/a> in the process.<\/span><\/p>\n

While analysts fawned for the scale born out of the merger<\/a>, cost-cutting opportunities, and sports betting potential, there were concerns that \u201cnew Caesars\u201d could be hindered by a heavy debt burden. The operator had $15 billion in liabilities at the end of last year. But due to improving margins and the Las Vegas rebound, its leverage targets are moving lower.<\/span><\/p>\n

Leverage targets continue to get moved down, as well with the company expecting to be below 5x net leverage next year, with the possibility of getting down closer to 4x,\u201d<\/strong> said Wieczynski.<\/span><\/p><\/blockquote>\n

The analyst adds that the forecast doesn’t include asset sales, and as 5x leverage is eclipsed to the downside, Caesars stock could become appealing to a broader swath of investors. On the conference call, CEO Reeg said the company isn’t planning to sell a Las Vegas casino until next year.<\/span><\/p>\n

Momentum Taking Shape<\/span><\/h2>\n

Over the course of the gaming industry earnings season, it’s been a common refrain from operators that March was a strong month<\/a>. But analysts and investors want to know if the momentum is carrying over into the current quarter. Caesars is among the companies that say, \u201cYes.\u201d<\/span><\/p>\n

\u201cManagement continues to highlight a strong margin expansion story and internal expectations for faster Vegas recovery compared to Street expectations,\u201d said Macquarie analyst Chad Beynon in a note.<\/span><\/p>\n

\n

He raised his price target on Caesars to $128, noting room pricing for the second half of 2021 is \u201chealthy\u201d and that the company could generate $1.6 billion of free cash flow (FCF) in 2023. Beynon also highlighted benefits from the recently closed acquisition of William Hill<\/a>.<\/span><\/p>\n<\/div>\n

“A successful integration of the US ops will further enhance CZR\u2019s long-term margin profile in online sports betting\/iGaming, which management has indicated is already running profitably. For now, we expect the company to achieve ~10%market share, which we acknowledge could be conservative, given what MGM has been able to achieve with their database,\u201d said the analyst.<\/p>\n","protected":false},"excerpt":{"rendered":"

Caesars Entertainment (NASDAQ:CZR) stock is higher by six percent in early trading Wednesday, a day after the gaming company delivered a blistering first-quarter earnings report — one including commentary that Las Vegas is roaring back to life. The Paris operator notched earnings before interest, taxes, depreciation and amortization (EBITDA) of $505 million in the January […]<\/p>\n","protected":false},"author":46,"featured_media":172709,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[62,10],"tags":[],"acf":[],"yoast_head":"\nCaesars Stock Rallies as Vegas Bookings, Margins Surge<\/title>\n<meta name=\"description\" content=\"Caesars stock draws slew of higher price targets after company forecasts a $1 billion EBITDA quarter at some point this year.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/caesars-stock-rallies-as-vegas-bookings-margins-surge\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Caesars Stock Rallies as Vegas Bookings, Margins Surge\" \/>\n<meta property=\"og:description\" content=\"Caesars stock draws slew of higher price targets after company forecasts a $1 billion EBITDA quarter at some point this year.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/caesars-stock-rallies-as-vegas-bookings-margins-surge\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2021-05-05T15:13:58+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-07-06T11:26:58+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/05\/CZR.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1136\" \/>\n\t<meta property=\"og:image:height\" content=\"852\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/caesars-stock-rallies-as-vegas-bookings-margins-surge\/\",\"url\":\"https:\/\/www.casino.org\/news\/caesars-stock-rallies-as-vegas-bookings-margins-surge\/\",\"name\":\"Caesars Stock Rallies as Vegas Bookings, Margins Surge\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-stock-rallies-as-vegas-bookings-margins-surge\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-stock-rallies-as-vegas-bookings-margins-surge\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/05\/CZR.jpg\",\"datePublished\":\"2021-05-05T15:13:58+00:00\",\"dateModified\":\"2021-07-06T11:26:58+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Caesars stock draws slew of higher price targets after company forecasts a $1 billion EBITDA quarter at some point this year.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-stock-rallies-as-vegas-bookings-margins-surge\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/caesars-stock-rallies-as-vegas-bookings-margins-surge\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/caesars-stock-rallies-as-vegas-bookings-margins-surge\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/05\/CZR.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/05\/CZR.jpg\",\"width\":1136,\"height\":852,\"caption\":\"The lobby of Caesars Palace Las Vegas. 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