Analyst Lowers Price Target on Caesars Stock Due to F1 Performance

In November, the Las Vegas Grand Prix, one of the much-anticipated events for Formula 1 fans, wrapped up. While the event attracted visitors from across the globe, its impact wasn’t as strong as initial expectations, at least for Caesars Entertainment. In a newly released report by CDC Gaming Reports, Joseph Greff, an analyst for J.P. Morgan, spoke about the soft impact of the F1 event on the company.

The analyst reduced his price target for Caesars’ stock by $1 from $55 to $54. Explaining this, Greff said that November’s Formula 1 event had “lower than previously expected performance.” According to the expert, the event impacted positively “higher-end properties,” including Caesars Palace. However, November’s racing event didn’t have a solid impact on Caesars’ lower and middle-tier properties.

Additionally, Greff spoke about the underwhelming performance of Caesars’ three casinos in Atlantic City. The analyst pointed out that the ongoing redevelopment of Harrah’s New Orleans also contributed to the downgrade.

Considering the aforementioned factors, Greff updated his estimation of Caesars’ cash flow for 2023. While the initial figure was $3.8 billion, the analyst’s new estimate was lowered to $3.4 billion. A marginal decrease was observed in the analyst’s projection for 2024 cash flow which was estimated at $3.81 billion.

The Company’s Average Price Target Hovers around $58

A separate report released by Benzinga reveals the evaluations of the 12-month price targets for Caesars by eight analysts. It suggests a low estimate of $48.00, a high estimate of $70.00 and an average target of $58.38. This average price target marked a 9% dip when compared to the prior average price target, the report confirmed.

The reduced price target by J.P. Morgan’s analyst comes at a time when Caesars parted ways with a number of entertainment executives. Up to 10 of the company’s senior-level entertainment executives were reportedly affected with the list including Chris Yancey, Amy Naples, Jessica Tindor, Mike Hodin and Paul Shlisky, among others.