{"id":221070,"date":"2022-07-13T13:55:12","date_gmt":"2022-07-13T18:55:12","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=221070"},"modified":"2022-07-13T16:25:38","modified_gmt":"2022-07-13T21:25:38","slug":"caesars-suffers-downgrade-as-keybanc-sees-macro-pressures-building","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/caesars-suffers-downgrade-as-keybanc-sees-macro-pressures-building\/","title":{"rendered":"Caesars Downgraded, as KeyBanc Sees Macro Concerns for Leisure Stocks"},"content":{"rendered":"

Caesars Entertainment (NASDAQ:CZR) is dealing with a downgrade today, as another research firm cites macroeconomic risks as a potential drag on leisure stocks.<\/p>\n

\"Caesars\"
Caesars Palace on the Las Vegas Strip. The stock was downgraded by KeyBanc today amid macro concerns. (Image: CNN<\/em>)<\/figcaption><\/figure>\n

In a note to clients, KeyBanc analyst Brett Andress downgrades Caesars to \u201csector weight\u201d from \u201coverweight,\u201d while broadly recommending reduced exposure to gaming equities. Andress stops short of calling for a sequel to the global financial crisis of 2008-09 on the Las Vegas Strip. But he notes that if such an ominous scenario materializes, Caesars would be among the most vulnerable names.<\/p>\n

Macro; high leverage and commensurate free cash flow (FCF) burden vs. peers,\u201d<\/strong> writes the analyst.<\/p><\/blockquote>\n

With $13.5 billion in debt<\/a> at the end of the first quarter, the Harrah\u2019s operator carries one of the largest burdens in the gaming industry.<\/p>\n

Caesars, Others Could Be Crimped by Inflation<\/h2>\n

KeyBanc\u2019s downgrade of Caesars arrives on the same day the Labor Department said the Consumer Price Index (CPI) jumped 9.1% in June. That was more than expected and represents another new four-decade high.<\/p>\n

\n

With consumers feeling inflationary pressures on multiple fronts, including essentials such as food, fuel, and housing, cutting back on discretionary spending is a reasonable way to deal with those higher prices. That could pinch casino operators, some of which are already acknowledging signs<\/a> of visitors reining in spending. Persistent inflation could also compel the Federal Reserve to accelerate its interest rate-hiking plans.<\/p>\n<\/div>\n

\u201cWith the hot month-over-month and year-over-year numbers coming in as they have, this tells the Federal Reserve it has more work to do with higher interest rates to eventually achieve its mandate of stable prices, or lower inflation, in this case. Look for another rate increase of as much as 75 basis points at the FOMC meeting at the end of this month,” said Bankrate Senior Economic analyst Mark Hamrick.<\/p>\n

Rising interest rates drag on heavily indebted companies — a box Caesars clearly checks. However, the Horseshoe operator is prioritizing debt reduction<\/a>, and could soon announce an asset sale in Las Vegas to that effect.<\/p>\n

Caesars Not Alone<\/h2>\n

Caesars isn\u2019t the only leisure stock that KeyBanc downgraded today. Nor is it the only gaming name the research firm has reservations about.<\/p>\n

\n

The bank trimmed price targets on Boyd Gaming (NYSE:BYD), Churchill Downs (NASDAQ:CHDN), and Red Rock Resorts (NASDAQ:RRR). Boyd goes to $70 from $78, while Churchill moves to $280 from $300 and Red Rock drops to $45 from $60.<\/p>\n<\/div>\n

Deutsche Bank analyst Carlo Santarelli cuts price forecasts on Boyd and Red Rock, as well as Golden Entertainment (NASDAQ:GDEN). All three are heavily dependent on the Las Vegas locals market, which Santarelli says touched its cyclical peak, but \u201cremains healthy.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Caesars Entertainment (NASDAQ:CZR) is dealing with a downgrade today, as another research firm cites macroeconomic risks as a potential drag on leisure stocks. In a note to clients, KeyBanc analyst Brett Andress downgrades Caesars to \u201csector weight\u201d from \u201coverweight,\u201d while broadly recommending reduced exposure to gaming equities. Andress stops short of calling for a sequel […]<\/p>\n","protected":false},"author":46,"featured_media":221071,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[62,10],"tags":[],"acf":[],"yoast_head":"\nCaesars Suffers Downgrade As KeyBanc Sees Macro Pressures Building<\/title>\n<meta name=\"description\" content=\"Caesars downgraded as KeyBanc sees macroeconomic woes plaguing gaming stocks.\" \/>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Caesars Suffers Downgrade As KeyBanc Sees Macro Pressures Building\" \/>\n<meta property=\"og:description\" content=\"Caesars downgraded as KeyBanc sees macroeconomic woes plaguing gaming stocks.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/caesars-suffers-downgrade-as-keybanc-sees-macro-pressures-building\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2022-07-13T18:55:12+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-07-13T21:25:38+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/07\/CP.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"675\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/caesars-suffers-downgrade-as-keybanc-sees-macro-pressures-building\/\",\"url\":\"https:\/\/www.casino.org\/news\/caesars-suffers-downgrade-as-keybanc-sees-macro-pressures-building\/\",\"name\":\"Caesars Suffers Downgrade As KeyBanc Sees Macro Pressures Building\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-suffers-downgrade-as-keybanc-sees-macro-pressures-building\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-suffers-downgrade-as-keybanc-sees-macro-pressures-building\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/07\/CP.jpg\",\"datePublished\":\"2022-07-13T18:55:12+00:00\",\"dateModified\":\"2022-07-13T21:25:38+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Caesars downgraded as KeyBanc sees macroeconomic woes plaguing gaming stocks.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-suffers-downgrade-as-keybanc-sees-macro-pressures-building\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/caesars-suffers-downgrade-as-keybanc-sees-macro-pressures-building\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/caesars-suffers-downgrade-as-keybanc-sees-macro-pressures-building\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/07\/CP.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/07\/CP.jpg\",\"width\":1200,\"height\":675,\"caption\":\"Caesars Palace on the Las Vegas Strip. 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