{"id":224591,"date":"2022-08-03T14:03:57","date_gmt":"2022-08-03T19:03:57","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=224591"},"modified":"2022-08-03T17:04:42","modified_gmt":"2022-08-03T22:04:42","slug":"caesars-slow-playing-vegas-asset-sale-analysts-like-stock","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/caesars-slow-playing-vegas-asset-sale-analysts-like-stock\/","title":{"rendered":"Caesars Asset Sale Could Happen in Months, Stock \u2018Woefully Undervalued,\u2019 Says Analyst"},"content":{"rendered":"

Caesars Entertainment (NASDAQ:CZR) delivered estimate-beating second-quarter revenue and earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) late Tuesday. Although there wasn\u2019t a specific update on the long-awaited sale of one of its Las Vegas Strip assets, the company\u2019s shares are considered dramatically undervalued by some analysts.<\/p>\n

\"Caesars\"
Caesars Palace Las Vegas., seen above. The company’s asset sale plans may take a little while longer. (Image: Getty Images)<\/figcaption><\/figure>\n

The divestment of one of its Strip properties<\/a> is considered essential to its debt-reduction efforts and was widely expected to be announced earlier this year. But that hasn\u2019t occurred as of yet. On a conference call with analysts, Caesars CEO Tom Reeg said there could be an update by the end of the summer.<\/p>\n

So just to be clear, we’ve talked about this on other calls. It’s very clear the time line that is laid out in the VICI documents that govern this,\u201d he said in response to a question from Stifel analyst Steven Wieczynski. \u201cSo we launched early this year, the deadline is by the end of the summer. And every deadline I’ve ever seen in deal land, the work goes into that deadline. For us — and there’s — there are plenty of interested parties.\u201d<\/p><\/blockquote>\n

In the above comment, Reeg is referencing an agreement struck with VICI Properties Inc. (NYSE:VICI)<\/a> in 2019 when Eldorado Resorts announced its $17.3 billion takeover of \u201cold Caesars.\u201d Under that accord, VICI has rights of first refusal for sales or sale-leaseback deals on two Las Vegas Strip properties.<\/p>\n

The first Sin City deal would be for one of the following gaming venues: Flamingo Las Vegas, Bally\u2019s Las Vegas, Paris Las Vegas, and Planet Hollywood Resort & Casino. The second would include the remainders from that group and the LINQ Hotel & Casino.<\/p>\n

At the end of the second quarter, the casino operator was $ 14.2 billion in debt, compared to $997 million in cash.<\/p>\n

Caesars Has Good Reasons to Slow Strip Asset Sale<\/h2>\n

While Caesars sports one of the gaming industry\u2019s heftiest debt burdens, some analysts argue the operator is right to take a pragmatic approach to sell one of its Las Vegas venues.<\/p>\n

\u201cWhile we believe it would be beneficial to share valuation to accelerate debt paydown anchored by a Strip Asset sale, we believe CZR\u2019s Strip asset TTM EBITDA is higher than it had been, and we do not see CZRs selling a ~$215M to $220M EBITDA Strip asset for under $2.5B,\u201d wrote B Riley analyst David Bain in a note to clients. \u201cWe believe CZRs remains in advanced negotiations with a strategic buyer, and while the final (likely near-term) outcome is unknown, there is certainly no need for a sale to occur for shares to continue to march upward, in our view.\u201d<\/p>\n

\n

He points out that Caesars has slashed debt by about $2 billion in just 18 months and that the stock is \u201cwoefully undervalued.\u201d He has a \u201cbuy\u201d rating on the Harrah\u2019s operator<\/a> with a $102 price target, implying the shares can more than double from the Aug. 2 close.<\/p>\n<\/div>\n

In addition to active debt-trimming efforts, Caesars is paring losses in its digital business, which includes Caesars Sportsbook. As Bain notes, that unit was nearly profitable in July, and its second-quarter loss of $69 million was 50% better than Wall Street forecast.<\/p>\n

Caesars Cash Flow Outlook Strong<\/h2>\n

Integral to debt reduction efforts is a company\u2019s ability to generate free cash flow (FCF), and the consensus is building Caesars has that<\/a>.<\/p>\n

What we believe is most important is the fact CZR\u2019s assets continue to produce strong results even in the current murky macro backdrop. Leverage will continue to be the number one overhang on this story. But we believe CZR can still produce ~$1B in FCF even in a recessionary environment,\u201d noted Stifel\u2019s Wieczynski.<\/p><\/blockquote>\n

He rates the stock a \u201cbuy\u201d with a $63 price target.<\/p>\n","protected":false},"excerpt":{"rendered":"

Caesars Entertainment (NASDAQ:CZR) delivered estimate-beating second-quarter revenue and earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) late Tuesday. Although there wasn\u2019t a specific update on the long-awaited sale of one of its Las Vegas Strip assets, the company\u2019s shares are considered dramatically undervalued by some analysts. The divestment of one of […]<\/p>\n","protected":false},"author":46,"featured_media":224592,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[62,10,81886],"tags":[81897,81903,23],"acf":[],"yoast_head":"\nCaesars Slow Playing Vegas Asset Sale, Analysts Like Stock<\/title>\n<meta name=\"description\" content=\"Caesars Las Vegas asset sale could be announced later this summer.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/caesars-slow-playing-vegas-asset-sale-analysts-like-stock\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Caesars Slow Playing Vegas Asset Sale, Analysts Like Stock\" \/>\n<meta property=\"og:description\" content=\"Caesars Las Vegas asset sale could be announced later this summer.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/caesars-slow-playing-vegas-asset-sale-analysts-like-stock\/\" \/>\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=\"2022-08-03T19:03:57+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-08-03T22:04:42+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/CP4-scaled.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2560\" \/>\n\t<meta property=\"og:image:height\" content=\"1709\" \/>\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=\"3 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-slow-playing-vegas-asset-sale-analysts-like-stock\/\",\"url\":\"https:\/\/www.casino.org\/news\/caesars-slow-playing-vegas-asset-sale-analysts-like-stock\/\",\"name\":\"Caesars Slow Playing Vegas Asset Sale, Analysts Like Stock\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-slow-playing-vegas-asset-sale-analysts-like-stock\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-slow-playing-vegas-asset-sale-analysts-like-stock\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/CP4-scaled.jpg\",\"datePublished\":\"2022-08-03T19:03:57+00:00\",\"dateModified\":\"2022-08-03T22:04:42+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Caesars Las Vegas asset sale could be announced later this summer.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-slow-playing-vegas-asset-sale-analysts-like-stock\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/caesars-slow-playing-vegas-asset-sale-analysts-like-stock\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/caesars-slow-playing-vegas-asset-sale-analysts-like-stock\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/CP4-scaled.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/CP4-scaled.jpg\",\"width\":2560,\"height\":1709,\"caption\":\"Caesars Palace Las Vegas. 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