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Analysts Express Mixed Opinions on the Future of Caesars Entertainment

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Caesars Entertainment has recently become a major topic of interest among stock analysts, with varying views on the company’s future.

One optimistic perspective comes from JMP Securities, who began coverage of the company on January 9. They rated Caesars as “outperform” and set a price target of $65.00, indicating a potential increase of 40.54% from the stock’s current value. On the other hand, JPMorgan Chase & Co. took a more cautious approach, reducing their price target to $54.00, which still suggests a 19.87% upside.

Greater Interest Following October Earnings Data

The company caught analysts’ attention with its financial results released on October 31, 2023. Caesars outperformed the consensus estimates, posting earnings of $0.34 per share, surpassing the expected $0.27. Additionally, the company’s revenue reached $2.99 billion, which was above the forecasted $2.94 billion.

There has also been some notable insider activity, with Director Michael E. Pegram acquiring 15,000 shares for $628,500 at an average price of $41.90. This purchase demonstrates Pegram’s confidence in Caesars, as he now owns 136,697 shares worth roughly $5,727,604.30.

Large institutional investors are also changing their stakes in Caesars. Soros Capital Management slightly increased its share by 0.4%. Czech National Bank and Creative Planning also upped their stakes by 0.8% and 2.6%, respectively.

Related: Entain Pressured by US Hedge Funds over Leadership and Share Price

Price Target Reduced by Morgan Stanley

JP Morgan’s price target reduction was mirrored by Morgan Stanley setting a new target of $45. Despite this, of the 16 analysts covering Caesars, the majority view the stock positively, with 12 assigning a rating of “strong buy” or “buy” and four suggesting a “hold”. The average price target among these analysts is $61.94, indicating a 36.55% potential upside. However, some warned of possible downward adjustments.

Towards the end of last year, Barclays analyst Brandt Montour chose Penn National Gaming (PENN) and Caesars Entertainment as top gaming picks for 2024. He mentioned Penn’s partnership with ESPN Bet and highlighted Caesars’ efforts in reducing debt and generating strong cash flow.

In contrast, Shaun Kelley from Bank of America has a different view. He predicts that Caesars might sell two of its Indiana properties, Horseshoe Indianapolis and Harrah’s Hoosier Park, to alleviate financial burdens. The sales could generate nearly $2 billion in net proceeds, with VICI Properties potentially the buyer, and it would be in keeping with Caesars’ goal of lowering leverage.

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