Published on: January 15, 2026, 11:13h.
Updated on: January 15, 2026, 11:13h.
- Caesars’ stock is beginning to regain momentum.
- Analyst reports indicate a stabilization in lower-end Las Vegas tourism trends.
- Cuts in interest rates could positively impact share prices.
After a challenging year in 2025, Caesars Entertainment (NASDAQ: CZR) has seen a 6% upswing at the start of 2026, although its valuation continues to lag behind historical averages.
Texas Capital analyst David Bain reports that Caesars, the operator of Harrah’s, is rated as a “buy” with a price target of $59, indicating the stock could potentially more than double from its current state. With signals of recovery along the Las Vegas Strip—where Caesars ranks as the second-largest operator—Bain predicts a growth of around 6% in Caesars’ earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) for this year.
“We expect Las Vegas to witness year-over-year growth starting in Q2 2026 with consistent improvements projected throughout the year,” Bain notes. “CZR’s historically low valuation will likely see an uptick in 2026 due to growth in Las Vegas, ongoing regional stability, notable advancement in digital operations, and a more favorable interest rate landscape.”
There were no modifications made to the fourth-quarter estimates for Las Vegas. Caesars is set to release these financial results on February 17.
Potential Gains for Caesars from Las Vegas
Last year’s Las Vegas visitor numbers were affected by various macroeconomic issues, including Canadian responses to U.S. trade tariffs and high unemployment rates in nearby California. However, optimism exists on Wall Street that 2026 will be more favorable for Strip operators.
Bain highlights that a robust convention schedule could enhance several Caesars properties along the Strip, coupled with tax incentives from the One Big Beautiful Bill Act (OBBA), which is expected to offer support to Caesars’ Las Vegas operations, regional casinos, and its digital segment.
The analyst further mentions a lingering “softness” among “lower-end” leisure visitors to Las Vegas, though these trends are beginning to stabilize. This is crucial for both Caesars and MGM, as many budget-conscious consumers feel they are priced out of Las Vegas while being inclined to return if gaming companies enhance their value offerings.
On the digital front, Bain has revised his fourth-quarter EBITDA estimate down to $70 million from $84 million due to disruptions in October hold. He also pointed out that Caesars could stand to benefit from Maine’s surprising approval of iGaming.
Further Interest Rate Cuts Could Offer a Boost for Caesars Stock
With one of the highest debt loads in the industry, Caesars remains closely linked to monetary easing from the Federal Reserve. Bain notes that for every 100 basis points drop in rates, the gaming company could save approximately $60 million in annual interest expenses. However, an ongoing criminal investigation by the Justice Department into Federal Reserve Chair Jerome Powell may cast uncertainty over upcoming rate cut strategies.
The positive takeaway for Caesars shareholders is that based on projected 2026 free cash flow (FCF) yield of 22%, the stock is evidently undervalued.
“If shares were priced at an 11% FCF yield, they would be worth $50—over double yesterday’s closing figure. At a valuation of 7.5x EV/EBITDA, considerably below its historical norm, CZR shares would retail for $40, approximately 60% higher than yesterday’s closing price,” Bain concludes.