{"id":240751,"date":"2022-11-02T15:58:55","date_gmt":"2022-11-02T20:58:55","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=240751"},"modified":"2022-11-10T14:20:58","modified_gmt":"2022-11-10T20:20:58","slug":"caesars-stock-endures-surprising-downgrade-despite-strong-q3-results","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/caesars-stock-endures-surprising-downgrade-despite-strong-q3-results\/","title":{"rendered":"Caesars Stock Contends with Downgrade Despite Earnings Beat"},"content":{"rendered":"

Caesars Entertainment (NASDAQ:CZR) delivered estimate-beating third-quarter results on Tuesday. While analysts are mostly upbeat about the report, there\u2019s at least one dissenting voice.<\/p>\n

\"Caesars
Visitors enter Caesars Palace Las Vegas. An analyst surprisingly downgraded the stock today. (Image: David Paul Morris\/Bloomberg<\/em>)<\/figcaption><\/figure>\n

In a note to clients today, CFRA Research Arun Sundaram downgraded Caesars stock to \u201chold\u201d from \u201cbuy\u201d while paring his 12-month price target on the shares to $35 from $40. That implies a significant downside from today\u2019s closing handle around $44.<\/p>\n

We now see limited upside to shares as the economic backdrop weakens and we expect travel demand to fall in 2023, leading to operating profit lower than their interest payments,\u201d<\/strong> wrote the analyst.<\/p><\/blockquote>\n

Recent GDP data suggest the US economy is already meeting the traditional definition of a recession \u2014 two consecutive quarters of negative growth. The third-quarter report showed negligible growth. While the gaming industry isn\u2019t yet reflecting a recession<\/a>, some Wall Street banks and economists are forecasting the arrival of economic contraction in 2023.<\/p>\n

CFRA Concerned About Recession<\/h2>\n

Broadly speaking, Caesars\u2019 third-quarter results were solid. The casino giant said the October performance was the best in company history, indicating the current quarter is off to an impressive start. However, CFRA\u2019s Sundaram highlights some potentially concerning data points.<\/p>\n

\u201cCZR’s Las Vegas segment same-store sales grew 5.9% year-over-year in Q3, while its Regional segment was flat, with adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) down 4% in Las Vegas and up 3% for its Regional segment,\u201d <\/strong>noted the analyst.<\/p>\n

Caesars is the second-largest operator<\/a> on the Las Vegas Strip, meaning there is an element of economic sensitivity with the stock. However, Caesars management remains bullish on the Strip and its regional properties, saying they see no signs of softening demand.<\/p>\n

The gaming company further impressed analysts and investors by reporting that its digital unit, which includes Caesars Sportsbook, lost just $38 million in the September quarter. That’s compared with a year-earlier loss of $164 million.<\/p>\n

CFRA Says Asset Sale Still Necessary<\/h2>\n

In a mild surprise, Caesars management told analysts yesterday it will not move forward with selling one of its Las Vegas Strip assets<\/a>. Coming into this year, the investment community widely viewed such a move as essential to the operator\u2019s efforts to pare debt. Sundaram says asset sales are still necessary for Caesars.<\/p>\n

\u201cIn our base case, we expect the company to sell off assets in order to pay down debt and make interest payments in 2023, and at best, the company will make enough operating profit to pay interest on its debt. We see other opportunities in the gaming space with less risk,\u201d <\/strong>according to the analyst.<\/p>\n

Even without the benefit of an asset sale, Caesars lowered its liabilities to $13.3 billion as of Sept. 30, down from $13.7 billion at the end of the second quarter.<\/p>\n","protected":false},"excerpt":{"rendered":"

Caesars Entertainment (NASDAQ:CZR) delivered estimate-beating third-quarter results on Tuesday. While analysts are mostly upbeat about the report, there\u2019s at least one dissenting voice. In a note to clients today, CFRA Research Arun Sundaram downgraded Caesars stock to \u201chold\u201d from \u201cbuy\u201d while paring his 12-month price target on the shares to $35 from $40. That implies […]<\/p>\n","protected":false},"author":46,"featured_media":240753,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[62,10,81886],"tags":[81897,81903,23],"acf":[],"yoast_head":"\nCaesars Stock Endures Surprising Downgrade Despite Strong Q3 Results<\/title>\n<meta name=\"description\" content=\"Caesars stock could face recession headwinds says analyst that downgraded the shares.\" \/>\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-endures-surprising-downgrade-despite-strong-q3-results\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Caesars Stock Endures Surprising Downgrade Despite Strong Q3 Results\" \/>\n<meta property=\"og:description\" content=\"Caesars stock could face recession headwinds says analyst that downgraded the shares.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/caesars-stock-endures-surprising-downgrade-despite-strong-q3-results\/\" \/>\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=\"2022-11-02T20:58:55+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-11-10T20:20:58+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/CP3.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2200\" \/>\n\t<meta property=\"og:image:height\" content=\"1468\" \/>\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=\"2 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-endures-surprising-downgrade-despite-strong-q3-results\/\",\"url\":\"https:\/\/www.casino.org\/news\/caesars-stock-endures-surprising-downgrade-despite-strong-q3-results\/\",\"name\":\"Caesars Stock Endures Surprising Downgrade Despite Strong Q3 Results\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-stock-endures-surprising-downgrade-despite-strong-q3-results\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-stock-endures-surprising-downgrade-despite-strong-q3-results\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/CP3.jpg\",\"datePublished\":\"2022-11-02T20:58:55+00:00\",\"dateModified\":\"2022-11-10T20:20:58+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Caesars stock could face recession headwinds says analyst that downgraded the shares.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-stock-endures-surprising-downgrade-despite-strong-q3-results\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/caesars-stock-endures-surprising-downgrade-despite-strong-q3-results\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/caesars-stock-endures-surprising-downgrade-despite-strong-q3-results\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/CP3.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/CP3.jpg\",\"width\":2200,\"height\":1468,\"caption\":\"Visitors enter Caesars Palace Las Vegas. 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