{"id":283674,"date":"2023-08-02T13:26:28","date_gmt":"2023-08-02T18:26:28","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=283674"},"modified":"2023-08-02T13:39:07","modified_gmt":"2023-08-02T18:39:07","slug":"caesars-stock-supported-by-management-free-cash-flow-view","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/caesars-stock-supported-by-management-free-cash-flow-view\/","title":{"rendered":"Caesars Stock Remains Analyst Fave Despite Tepid Q2 Results"},"content":{"rendered":"

Caesars Entertainment (NASDAQ: CZR) didn\u2019t knock the cover off the ball Tuesday with its second-quarter results. But the stock remains a gaming favorite of sell-side analysts.<\/p>\n

\"Caesars
Caesars CEO Tom Reeg in a CNBC<\/em> interview. Management is one reason analysts love Caesars stock. (Image: CNBC<\/em>)<\/figcaption><\/figure>\n

In midday trading on Wednesday, shares of the Horseshoe operator are lower by more than 4%, joining the broader gaming equity complex to the downside. However, multiple analysts lifted price targets on Caesars today, despite lethargic second-quarter results caused by some tough year-over-year comparisons. Stifel analyst Steven Wieczynski remains confident in Caesars management, led by CEO Tom Reeg<\/a>.<\/p>\n

With CZR you get the best management team in gaming and a company that should produce significant free cash flow in any normalized environment,\u201d wrote the analyst. \u201cWe believe the company can delever their balance sheet which should in turn bring longer-term investors into this story.\u201d<\/p><\/blockquote>\n

Wieczynski reiterated a \u201cbuy\u201d rating on the stock, boosting his price target to $74 from $68. That new forecast implies upside of about 27.5% from the August 1 close.<\/p>\n

Debt Reduction Can Drive Caesars Stock Story<\/h2>\n

For years, Caesars has been one of the most indebted companies in the gaming industry. Altering that profile for the better is a top priority for management, and progress is being made on that front.<\/p>\n

At the end of the first quarter, the gaming company had $13.2 billion<\/a> in debt. As of June 30, that figure was down to $12.7 billion. Caesars also had $1.1 billion in cash, not including restricted cash of $205 million.<\/p>\n

\n

Those efforts, which could be spurred by an eventual asset sale, are being lauded by analysts and could put Caesars on a path to generate $5 billion in earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2025. That implies leverage in the low 3x area and free cash flow in the area of $12 a share.<\/p>\n<\/div>\n

\u201cWe continue to recommend CZR given the deleveraging story, Vegas strength, and Digital path to profitability,\u201d noted Macquarie analyst Chad Beynon. \u201cWhile some may question CZR\u2019s aspirational $5bn 2025E EBITDA figure, we believe the deleveraging story is more concrete as Digital is now self-funding and on the way to profitability.\u201d<\/p>\n

In one of the bright spots in the second-quarter earnings report, Caesars Digital<\/a> notched its first profitable quarter.<\/p>\n

Caesars Long-Term Outlook Attractive<\/h2>\n

For now, investors considering Caesars have to contend with the company’s large, though declining, debt burden and its ongoing battles against the specters of macroeconomic headwinds and increasing competition in some regional casino markets. On the other hand, the long-term outlook is arguably compelling.<\/p>\n

That includes free cash flow eventually meeting or exceeding expectations, potentially positioning the Harrah\u2019s operator to repurchase shares or explore accretive transactions.<\/strong><\/p>\n

\u201cWhat will get more attention are some comments that CZR\u2019s CEO made in which he indicated that over the next couple of years, the company could be in a position to explore \u2018external opportunities,\u2019\u201d concludes Wieczynski. \u201cWhat do those comments mean? We aren\u2019t exactly sure, and we don\u2019t believe there is anything coming imminently. But we do believe those comments should be taken seriously, and believe it\u2019s a sign that CZR\u2019s FCF generation should be so strong in the out-years that it will allow them to not only delever and buy back shares, but also explore other \u2018material\u2019 options.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Caesars Entertainment (NASDAQ: CZR) didn\u2019t knock the cover off the ball Tuesday with its second-quarter results. But the stock remains a gaming favorite of sell-side analysts. In midday trading on Wednesday, shares of the Horseshoe operator are lower by more than 4%, joining the broader gaming equity complex to the downside. However, multiple analysts lifted […]<\/p>\n","protected":false},"author":46,"featured_media":172682,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,33810,81886],"tags":[81903,81898,23],"acf":[],"yoast_head":"\nCaesars Stock Supported By Management, Free Cash Flow View<\/title>\n<meta name=\"description\" content=\"Caesars stock still favored by analyst due to strong management, free cash flow outlook.\" \/>\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-stock-supported-by-management-free-cash-flow-view\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Caesars Stock Supported By Management, Free Cash Flow View\" \/>\n<meta property=\"og:description\" content=\"Caesars stock still favored by analyst due to strong management, free cash flow outlook.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/caesars-stock-supported-by-management-free-cash-flow-view\/\" \/>\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=\"2023-08-02T18:26:28+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-08-02T18:39:07+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/05\/reeg.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1920\" \/>\n\t<meta property=\"og:image:height\" content=\"1080\" \/>\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-stock-supported-by-management-free-cash-flow-view\/\",\"url\":\"https:\/\/www.casino.org\/news\/caesars-stock-supported-by-management-free-cash-flow-view\/\",\"name\":\"Caesars Stock Supported By Management, Free Cash Flow View\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-stock-supported-by-management-free-cash-flow-view\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-stock-supported-by-management-free-cash-flow-view\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/05\/reeg.jpg\",\"datePublished\":\"2023-08-02T18:26:28+00:00\",\"dateModified\":\"2023-08-02T18:39:07+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Caesars stock still favored by analyst due to strong management, free cash flow outlook.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-stock-supported-by-management-free-cash-flow-view\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/caesars-stock-supported-by-management-free-cash-flow-view\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/caesars-stock-supported-by-management-free-cash-flow-view\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/05\/reeg.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/05\/reeg.jpg\",\"width\":1920,\"height\":1080,\"caption\":\"Caesars CEO Tom Reeg in a CNBC interview. 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