Deutsche Bank analysts maintained a Buy rating and a $60.00 price target on Caesars Entertainment (NASDAQ:CZR). The analysts noted a reduction in the fourth-quarter 2023 estimates for Caesars Entertainment, with lowered forecasts in each of the company’s three key segments: Las Vegas, Regional, and Digital. The revision is based on factors such as feedback on Formula 1, slower regional performance up to November, and widely known challenges in the online sports betting (OSB) industry.
The analysts anticipate that these changes won’t surprise investors and expect consensus forecasts to adjust downwards in the upcoming weeks. Caesars Entertainment plans to announce its earnings on February 20, and considering the debt maturities in 2025 and an improved debt market, there might be a refinancing announcement alongside the earnings, similar to last year’s early announcement on January 23, 2023.
The analysts continue to see Caesars Entertainment’s shares as offering a strong risk-reward balance, assuming no significant macroeconomic downturns. The shares are currently providing a 15% free cash flow yield based on their conservative 2025 forecasts, which are below consensus. The analysts expect significant debt reduction and financial leverage improvements to benefit equity holders. Coupled with modest expectations for 2024, this presents a favorable situation for the company.