Published date: January 10, 2024

Last updated on: January 10, 2024

Caesars Entertainment (NASDAQ: CZR) shares have underperformed the broader market over the past year. Analysts are split on the casino equity’s future prospects.

Morgan Stanley lowered its price target on Caesars, while MGM Resorts International (NYSE: MGM) is viewed more favorably by the bank. Caesars’ stock is rated as a “strong buy” or “buy” by 12 analysts, but others have reservations and there’s potential for downward revisions.

Caesars’ Challenges

Caesars’ stock recently benefitted from the Las Vegas Grand Prix, but most of the event’s success went to other luxury properties, according to a recent JPMorgan report. The company’s Atlantic City, NJ, venues also face strong competition from other market leaders.

Positive Outlook

JMP Securities analyst Jordan Bender believes in Caesars’ cost management and future cash flow possibilities, resulting in a high price target.

More impressive, keeping a lid on excess costs has made legacy Eldorado/Caesars one of the most successful margin expansion stories over this time, highlighting its remarkable return on invested capital/synergy track record,” observed Bender.

Bender set a $65 price target for Caesars, expecting long-term free cash flow generation.