In the grand theatre of high-stakes casino plays, the marquees along Wall Street are as bright and unpredictable as those illuminating the Las Vegas Strip. No exception to this dazzling dynamism is the performance of Caesars Entertainment, whose stock has seen better days under the limelight. As the 2024 curtain rises, its shares have whimpered into a 3.58% retreat since the new year’s toast, trailing behind the vigorous pace set by the broader market’s indices.
While Caesars’ name doesn’t stir controversy within the cacophony of market chatter, the maestros of market analysis are striking myriad chords about the casino equity’s prospects. The halls of hedge funds resonate with murmurs of favor for the Caesars Palace operator, yet an undercurrent of division ripples through the analyst community.
A tangible discordance echoed when Morgan Stanley, brushing their analytical quill, decided to revise their score of expectations. In an aria of reevaluation, they trimmed their price target for the venerable Flamingo operator to $45 from a slightly more optimistic $48. The mellow note harmonizes with the somber melody of its recent closing at $45.36, signaling a potential dip the shares may endure.
Meanwhile, Morgan Stanley orchestrates a more optimistic overture for MGM Resorts International, the storied rival of Caesars on the Las Vegas Strip. The bank’s orchestra foresees a composition of gains for MGM’s shares in the current year, potentially positioning it as the premier act for those seeking the Vegas vibe in their portfolios.
Sifting through the ensemble of 16 analysts conjuring the future of Caesars, one can spot 12 raising the baton for “strong buy” or “buy,” while four others rest their instruments on “hold.” The collective crescendo builds to a consensus price target of $61.94, suggesting a lofty potential ascent of 36.55% from where the stock currently stands. Yet even that symphony carries a sotto voce caution, with hints of possible downward revisions in the score.
Flashes of glamour from the Las Vegas Grand Prix, which roared its engines this past November, brightened the prospects for select Strip casino resorts. Caesars Palace basked in the limelight of this prestigious event’s benefits. However, the discerning eye of JPMorgan analyst Joseph Greff observes that the event’s largesse was not democratically distributed; the spoils went mostly to the loftier palaces of the Strip, such as those ruled by MGM and Wynn Resorts. Caesars’ mid-tier fortresses garnered less fortune from the F1 race’s pilgrimage to the desert oasis.
Greff, wielding his analytical quill with precision, adjusted the price target for Caesars’ shares to $54 from $55. His broad canvas of considerations stretched beyond the Strip, contemplating the disturbance caused by the construction at Harrah’s New Orleans as it metamorphoses into a Caesars Palace.
But all is not a Greek tragedy in the empire of Caesars. The whisper of brushes on drums signals the bullish rhythm carried by JMP Securities analyst Jordan Bender. He salutes Caesars’ leadership, adept at fine-tuning expenses into a symphony of sustainable free cash flow.
In favorable critique, Bender lauds, “The efficiency of Eldorado/Caesars is a testament of an exceptional tale of margin expansion, an ode to the triumphant return on invested capital and synergistic mastery.” His eyes gaze towards a golden horizon where he envisions the enterprise generating a hefty free cash flow of $1.6 billion, or a harmonious $7.50 a share, in the following year — hence, his $65 target for the empire’s stock.
As the stage of Fortune’s wheel continues to revolve, the drama of Caesars Entertainment remains a script in progress, with critics and spectators alike holding their breaths to see whether the next act will raise a toast of prosperity or lower the curtain on expectations.
