Truist Cuts MGM and Caesars Earnings Outlook After Soft Las Vegas Metrics
Truist Securities has trimmed profit forecasts for MGM Resorts and Caesars Entertainment after weak recent Las Vegas performance.
LISTEN TO THIS ARTICLE:In a note to investors last week, Truist analyst Barry Jonas reduced his adjusted EBITDA projections for both casino giants through 2027, citing softer-than-expected Strip revenue and visitation. Jonas lowered MGM Resorts International’s EBITDA estimates by 1% for 2025 and by 7% for 2026 and 2027; Caesars Entertainment’s EBITDA was cut by 1% for 2025 and 2026 and by 2% for 2027. Truist also nudged down its price target for MGM to $45 from $47 while keeping a constructive long-term view of both operators’ valuations.
"We lower our 2025, 2026, and 2027 EBITDA for MGM and Caesars, reflecting more conservatism on a Strip inflection to growth", Jonas wrote. "Our MGM price target moves to $45 from $47. That said, we still view MGM and Caesars as inexpensive, with Strip challenges well known."
Strip Revenue and Visitation Data
Jonas pointed to November and early December data from the Las Vegas Strip as the primary drivers of the reassessment. On a December basis, revenue per available room (RevPAR) trended roughly 13% lower year‑over‑year, while average daily room rates dipped about 1% and occupancy tracked down approximately 12% versus the prior year. Strip visitation was reported down near 5% year‑over‑year, even as convention attendance held roughly flat – a combination that compressed room and nongaming revenue opportunities.
Broad gaming metrics were mixed. November Strip gross gaming revenue (GGR) registered a decline of less than 1% year‑over‑year, largely reflecting weaker table-game performance and softer baccarat receipts. When excluding baccarat – a segment driven by a small number of high‑stakes players – normalized gaming revenue rose roughly 3% and total casino win excluding baccarat edged up about 1%.
Locals-facing properties continued to show resilience. Jonas noted that local casinos posted a 6% year‑over‑year increase in gaming revenue in November, with normalised gains of about 1%. For the fourth quarter overall, the locals market was tracking up near 3% year‑over‑year, supported primarily by strength in slot revenue.
Operational metrics also told a nuanced story: slot revenue in Nevada came in at $422 million for the month – up about 5.5% year‑over‑year – with handle rising roughly 5% and overall hold essentially flat. Table-game revenue of roughly $363 million fell about 7% year‑over‑year; the amount wagered (drop) was modestly higher, but hold declined by about 118 basis points. Baccarat win of approximately $137 million slipped by 6% year‑over‑year, with hold down roughly 232 basis points even as drop increased around 9%.
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Nevada Accounting Notes and Market Takeaways
Jonas underscored that some calendar and accounting nuances affected month‑to‑month comparisons. November 2025 included an extra Friday and one fewer Sunday versus November 2024, creating a small net positive shift under Nevada slot accounting conventions after a weekday moved between months. Operationally, slot and table unit counts were flat to down around 2%, producing year‑over‑year win per unit trends of roughly +5% for slots and -4% for tables.
Sports betting also showed healthy growth, with sports win near $29 million – up about 20% year‑over‑year – as handle rose around 4% and hold improved by nearly 96 basis points. Jonas suggested that mass‑market indicators – such as total casino win excluding baccarat and normalized gaming revenue – remain important gauges of broader demand even as high‑roller baccarat volatility complicates headline numbers.
Truist’s downgrades reflect a more cautious stance on when the Strip will resume stronger growth, not a call that either operator is structurally impaired. "We still view MGM and Caesars as inexpensive", Jonas added in the note, signaling that while near‑term earnings expectations have been tempered, the analyst sees longer‑term value if Strip fundamentals recover.
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