Caesars Downgraded, Waning Confidence in Casino Growth, Says Analyst
Posted on: November 4, 2025, 11:37h.
Last updated on: November 4, 2025, 12:09h.
- Slumping stock downgraded by Jefferies
- Confidence in land-based casino growth is “low,” says analyst
- Caesars could be forced to raise capital
Already mired in a lengthy slump, shares of Caesars Entertainment (NASDAQ: CZR) faltered anew on Tuesday after a sell-side analyst downgraded the stock.
In a new report to clients, Jefferies analyst David Katz lowered his rating on the gaming stock to “hold” from “buy,” citing the operator’s disappointing third-quarter results and the likelihood that brick-and-mortar casino earnings have yet to reach a nadir, among other factors.
We do not relish a downgrade for CZR with the shares down 40% year-to-date, but our reasons for upside have progressively diminished. Land-based gaming earnings have not found a bottom and may not have yet,” observes Katz. “Digital gaming growth expectations have also diminished, which defers the possibility of meaningful value capture.”
Katz slashed his price target on Caesars to $22 from $39, with that new forecast implying upside of about 10% from where the stock currently resides.
Caesars May Need to Raise Capital
Saddled with $11.9 billion in debt and junk credit ratings, Caesars could be faced with the specter of having to raise capital. If it has to do so, it would assuredly be subject to high interest rates due to its elevated debt levels and flimsy credit grades.
Katz says “confidence is low” that Caesars can see Las Vegas and regional casino earnings before interest, taxes, depreciation, and amortization (EBITDA) rise at a noteworthy clip this year and in 2026, as he forecasts increases of just 1.8% and 2.2%, respectively. He says property renovations are avenues for possibly boosting earnings, but that would require Caesars to lay out cash.
The company could also be confronted with spending if it’s able to reach a resolution with VICI Properties (NYSE: VICI) on the regional casino master lease. That issue has been a point of emphasis for shareholders in both companies and an overhang on both stocks.
“A solution to the elevated rent levels in the VICI regional master lease is probable, but likely to cost CZR capital, one way or another. In the end, we believe the likelihood the set-up gets worse for CZR is equal to the prospects for an upside surprise, with the outcome requiring outside forces,” adds Katz.
Caesars Might Not Find Digital Salvation
One of this year’s more prominent rumors in gaming circles is the possibility that Caesars would spin off its digital unit, which includes Caesars Sportsbook, as a way of generating value for shareholders. Management has previously said it believes the share prices don’t adequately reflect strides made in the online business.
While there is a belief that Caesars Digital could generate significant proceeds for the parent in a spinoff, that thesis has been damaged amid expectations the business will post lower-than-expected EBITDA next year and due to “elusive” structural hold, as Katz puts it.
“Digital gaming growth expectations have also diminished, which defers the possibility of meaningful value capture,” concludes the analyst.
Last Comment ( 1 )
When there's a bad accident on the highway, we can't help but look at it as we drive by. We really shouldn't, but it's often difficult to fight human nature. I have my bag of popcorn, and will be taking perverse pleasure in sitting back and watching Caesar's destroy itself. It was the choice of Eldorado to load itself up with unfathomable levels of debt - don't blame the customers for that. It was the choice of the "new" Caesar's to de-value every last feature of the Caesars Rewards program and, as a result, drive away every loyal customer the "old" Caesars had - don't blame the customers for that. It was Caesars that chose to transform the Caesars Rewards program from an average mid-tier program into one that has the lowest value and lowest benefits to players in all of Las Vegas - don't blame the customers for that. It was Caesars that chose to increase table minimums and tighten odds - don't blame the customers for that. It was Caesars that chose to continuously increase prices and fees (and implement new charges and fees), in an attempt to squeeze even more money from the customers, and then watch as many of these fees blew up on Social Media - driving home the nickel-and-diming reputation that Las Vegas has brought upon itself. Fast forward to today. All of the "genius" MBAs at Caesars (who are now watching their finances, Balance Sheets, and Income Statements circling the drain), are sitting in their C-Suite offices, scratching their heads, asking themselves why there aren't any customers on the casino floor. (Certainly it's not the result of anything WE did.) There's nothing Caesars could do or offer that would entice me to visit and spend money at any of their properties. But I will gamble on CZR stock when it eventually drops to about $5 a share. Caesars has been tucking it to customers for years; sit back, pass the popcorn around, and enjoy the show, as we all watch as Caesars gets it tucked to themselves for a change!!