Caesars Entertainment, Inc. (CZR) is a significant player in the gaming and hospitality sector, valued at $7.2 billion. Based in Reno, Nevada, Caesars has a wide reach, operating in 18 states. They offer a diverse range of services, including slot machines, video lottery terminals, e-tables, hotels, and various table games like poker. The company also has retail and online sports betting options.
Caesars is set to announce its fourth-quarter earnings on February 25. Analysts expect the company to report a loss of $0.04 per share. This would be a notable improvement from last year’s loss of $0.34 per share. However, Caesars has struggled with earnings surprises, missing Wall Street’s expectations in the past four quarters. Last quarter, they reported a loss that was much worse than anticipated, falling short of a projected profit of $0.21 per share.
Looking ahead, analysts predict that the company’s losses may deepen, forecasting a loss of $0.58 per share in fiscal 2024, a sharp decrease from a profit of $0.92 in fiscal 2023. However, there might be a turnaround in fiscal 2025, with expectations of a profit of $1.30, which would represent a growth of over 324% year-over-year.
Over the last year, shares of CZR have dropped by 23%, underperforming compared to the S&P 500’s 26.5% gain and a 33.1% increase in the Consumer Discretionary sector. The stock took a hit after the company’s weaker-than-expected Q3 earnings release on October 29, where they reported a loss of $0.04 per share. This figure was down from a profit of $0.34 in the prior year, and revenues fell by 4% to $2.9 billion, missing forecasts by 1.4%.
Several factors contributed to this disappointing performance, including increased competition and delays in construction projects. This was further compounded by reduced revenue from both the Managed and Branded and Las Vegas segments.
Despite the challenges, Wall Street analysts remain cautiously optimistic about Caesars Entertainment. The stock holds a “Moderate Buy” rating, with 15 analysts covering it. Of these, 11 recommend a “Strong Buy,” while three suggest a “Hold,” and only one advises a “Strong Sell.” This represents a slight shift from three months ago when more analysts were bullish on the stock.
The average price target for CZR stands at $50.43, signaling a potential upside of 48.1% from current levels.
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