Note: These are just the author’s thoughts, not official investing advice.
Growing cautious
Wall Street analysts have been growing pessimistic about Caesars Entertainment. Many major investment banks are downgrading their share price forecasts for the casino company, and the stock is being subject to a high level of short trading.
bearish about the firm’s ability to turn things around
The likes of Morgan Stanley, Susquehanna, and TD Cowen are bearish about the firm’s ability to turn things around, with Caesars’ share price dropping 43% over the past six months. While other casino stocks fell due to President Trump’s tariff policy, none of the big hitters like MGM, Wynn Resorts, or Las Vegas Sands have plummeted as much.
Dealing with rising costs
While its competitors have interests overseas in Macau, the UAE, and Japan, Caesars doesn’t currently have any international properties. This makes it more susceptible to any downturn in US tourism and entertainment.
The tariff war has caused fears about its impact on the average consumer, who will have less money in their pockets for discretionary spending.
falling from a net profit of $788m in 2023 to a net loss of $278m in 2024
Caesars is already feeling the pinch of increasing costs of sales, falling from a net profit of $788m in 2023 to a net loss of $278m in 2024, despite revenue staying more or less the same.
An uncertain future
Caesars also has significant debt, with long-term liabilities of $25bn. Its foray into the sports betting and online casino spaces hasn’t been as successful as its competitors, and many of its casinos are outdated.
committed $1bn in February to upgrading its eight Las Vegas Strip properties
While Caesars committed $1bn in February to upgrading its eight Las Vegas Strip properties, it will take time for the company to see a return on this investment.
The company’s share price now lies around the $25 mark, which is its lowest point since the onset of the pandemic in March 2020. People who are optimistic about the future might see this as a good entry point, while others will wait to see what the impact of the ongoing economic uncertainty will be before investing in a casino company with all its eggs in the North American basket.
