{"id":325247,"date":"2024-07-15T16:06:30","date_gmt":"2024-07-15T21:06:30","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=325247"},"modified":"2024-07-15T16:06:30","modified_gmt":"2024-07-15T21:06:30","slug":"caesars-downgraded-analyst-sees-underperformance-continuing","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/caesars-downgraded-analyst-sees-underperformance-continuing\/","title":{"rendered":"Caesars Downgraded, Price Target Slashed as Analyst Sees Underperformance Continuing"},"content":{"rendered":"

Shares of Caesars Entertainment (NASDAQ: CZR) slipped almost 2% today on above-average volume after Susquehanna analyst Joseph Stauff downgraded the gaming stock.<\/p>\n

\"Caesars
Caesars Palace Las Vegas. An analyst downgraded operator Caesars Entertainment, citing a widening gap between it and rival MGM. (Image: CNN<\/em>)<\/figcaption><\/figure>\n

In a note to clients, Stauff pared his rating on the Harrah\u2019s operator to \u201cnegative\u201d from \u201cneutral\u201d while slashing his price target on the shares to $33 from $44. That\u2019s well below Caesars\u2019 closing price of $39.22 today. The analyst believes Caesars is likely to continue lagging rival MGM Resorts International (NYSE: MGM).<\/p>\n

MGM and Caesars are the two largest operators on the Las Vegas Strip. Over the past year, shares of the latter slumped 27.46% while the former lost 5.80%. Year-to-date, the Bellagio operator is up 3.29%. While that lags the S&P 500 by a wide margin, it\u2019s still far superior to the 16.34% loss notched by Caesars since the start of 2024.<\/strong><\/p>\n

Caesars has enjoyed the support of some well-known investors this year<\/a>, but that\u2019s not enough to convince Stauff to be bullish on the casino giant. Assuming \u201cnegative\u201d is the equivalent of a \u201csell\u201d rating, Stauff is the only one of the 18 analysts covering Caesars to rate it in such fashion while 14 of his colleagues rate the stock the equivalents of \u201cbuy\u201d or \u201cstrong buy.\u201d<\/p>\n

\u2018Growing Disparity\u2019 Between Caesars, Rivals<\/h2>\n

The Susquehanna analyst observed that second-quarter regional casino data suggest a \u201cgrowing disparity\u201d between Caesars and rivals. It\u2019s possible that could be a point of discussion on the operator\u2019s earnings conference call on July 30.<\/p>\n

\n

Over the course of this year, some analysts and gaming companies themselves have mentioned reduced consumer spending among some guests in select regional casino<\/a> markets. Stauff said Caesars more than MGM is vulnerable to that trend because Caesars’ portfolio is “notably disadvantaged” due to its “lower-end customer base and lower-quality assets.\u201d<\/p>\n<\/div>\n

Those could be among the reasons Caesars has expressed a willingness to consider divesting what it describes as \u201cnon-core, non-operating<\/a>\u201d casinos that currently deliver little value to its overall portfolio.<\/p>\n

Stauff also noted that there\u2019s a growing gap between MGM and Caesars on the Strip. The analyst said the Horseshoe operator hasn\u2019t invested as much in Las Vegas as it probably should have because it\u2019s directed capital to digital gaming and regional casinos, but MGM has made substantial investments in its Sin City portfolio.<\/strong><\/p>\n

Debt Reduction Could Help Caesars<\/h2>\n

Clearly, Stauff has a pessimistic view on Caesars, but it\u2019s not widely shared and the operator could give investors reason to cheer if it shows material progress on debt reduction or announces asset sales that could assist in that endeavor.<\/p>\n

We believe elevated financing costs in the market have caused concerns over Caesars\u2019 high debt levels; we forecast the company\u2019s debt to adjusted EBITDA at 6.1 times in 2024,\u201d noted Morningstar analyst Dan Wasiolek. \u201cThis has presented an opportunity to own shares of a company with a management team that has been solid stewards of capital, as cash flow returns from strategic tie-ups were used to quickly pay down debt versus shareholder returns via dividends or share repurchases, which we believe is prudent.\u201d<\/p><\/blockquote>\n

At the end of the first quarter<\/a>, Caesars had $12.436 billion in outstanding liabilities compared to $12.439 billion at the end of 2023.<\/p>\n","protected":false},"excerpt":{"rendered":"

Shares of Caesars Entertainment (NASDAQ: CZR) slipped almost 2% today on above-average volume after Susquehanna analyst Joseph Stauff downgraded the gaming stock. In a note to clients, Stauff pared his rating on the Harrah\u2019s operator to \u201cnegative\u201d from \u201cneutral\u201d while slashing his price target on the shares to $33 from $44. That\u2019s well below Caesars\u2019 […]<\/p>\n","protected":false},"author":46,"featured_media":248038,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,33810,81886],"tags":[81903,81898,23],"acf":[],"yoast_head":"\nCaesars Downgraded, Analyst Sees Underperformance Continuing<\/title>\n<meta name=\"description\" content=\"Caesars Downgraded, Price Target Slashed as Analyst Sees Underperformance Continuing.\" \/>\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-downgraded-analyst-sees-underperformance-continuing\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Caesars Downgraded, Analyst Sees Underperformance Continuing\" \/>\n<meta property=\"og:description\" content=\"Caesars Downgraded, Price Target Slashed as Analyst Sees Underperformance Continuing.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/caesars-downgraded-analyst-sees-underperformance-continuing\/\" \/>\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=\"2024-07-15T21:06:30+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/12\/CP-1-scaled.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2560\" \/>\n\t<meta property=\"og:image:height\" content=\"1707\" \/>\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-downgraded-analyst-sees-underperformance-continuing\/\",\"url\":\"https:\/\/www.casino.org\/news\/caesars-downgraded-analyst-sees-underperformance-continuing\/\",\"name\":\"Caesars Downgraded, Analyst Sees Underperformance Continuing\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-downgraded-analyst-sees-underperformance-continuing\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-downgraded-analyst-sees-underperformance-continuing\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/12\/CP-1-scaled.jpg\",\"datePublished\":\"2024-07-15T21:06:30+00:00\",\"dateModified\":\"2024-07-15T21:06:30+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Caesars Downgraded, Price Target Slashed as Analyst Sees Underperformance Continuing.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-downgraded-analyst-sees-underperformance-continuing\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/caesars-downgraded-analyst-sees-underperformance-continuing\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/caesars-downgraded-analyst-sees-underperformance-continuing\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/12\/CP-1-scaled.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/12\/CP-1-scaled.jpg\",\"width\":2560,\"height\":1707,\"caption\":\"Caesars Palace Las Vegas. An analyst downgraded operator Caesars Entertainment, citing a widening gap between it and rival MGM. 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