Caesars Entertainment ‘Clock Has Run Out’ – Susquehanna
2022.07.20 22:18
Caesars Entertainment (CZR) ‘Clock Has Run Out’ – Susquehanna
By Sam Boughedda
A Susquehanna analyst reiterated a Negative rating and a $32 price target on Caesars Entertainment (NASDAQ:CZR) stock on Wednesday, providing negative commentary on the stock.
The analyst told investors in a note that while the company “navigated three Houdini-like transactions since 2020 (closing a merger 4 months after the pandemic started; horse trading multiple assets; narrowly closing sale of non-US WH assets to 888), we think the clock has run out and creates a difficult operating outlook.”
“In particular, we think 2023 consensus estimates are too high and that softening demand will hit LV the hardest (regional secondarily) magnified by CZR’s company-specific (1) high financial leverage with limited outs; (2) increased negative operating leverage from both margin compression and rents set to significantly increase in 3.5 months; and (3) a flawed digital strategy that will need more capital to fix,” wrote the analyst.
He added that they “do not believe LV bull case is sustainable (increasing LV hotel pricing due to return of convention business and return of international travelers)” and while regional may be stronger, it’s not initially sufficient to offset its larger bearish aspects.
