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With a market cap of $7.7 billion, Reno, Nevada-based Caesars Entertainment, Inc. (CZR) is a leading gaming and hospitality company operating casinos, resorts, and entertainment venues across North America and beyond. With properties in 18 states, it offers a diverse range of gaming options, including slot machines, table games, online gaming, and sports betting.
Shares of the casino and resort operator have underperformed the broader market over the past 52 weeks. CZR has dipped 17% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 21%. However, shares of CZR are up 6.9% on a YTD basis, outperforming SPX’s 1.9% gain.
Focusing more closely, CZR has also lagged behind the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 27.6% return over the past 52 weeks.
Shares of CZR tumbled 8.2% following its disappointing Q3 earnings release on Oct. 29. The company reported an adjusted loss of $0.04 per share and net revenue of $2.9 billion, both lagged the consensus estimate. The Regional segment’s revenues dropped 7.6% year over year to $1.5 billion, impacted by new competition, construction disruptions, and inclement weather, while Las Vegas revenues fell 1.3% to $1.1 billion due to weaker gaming volumes after the Rio divestiture.
For fiscal 2024, which ended in December, analysts expect CZR to report a loss of $0.64 per share, indicating a significant year-over-year decline. The company's earnings surprise history is unfavorable. It missed the consensus estimates in the last four quarters.
Among the 15 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 11 “Strong Buy” ratings, three “Holds,” and one “Strong Sell.”
On Nov. 26, 2024, JMP Securities lowered Caesars' price target to $57 while maintaining an “Outperform” rating. The firm cited stable gaming trends in Louisiana and Mississippi but noted challenges in passing an iGaming bill, despite potential gubernatorial support.
As of writing, Caesars Entertainment is trading below the mean price target of $48.80. The Street-high price target of $58 implies a potential upside of 62.3% from the current price levels.
