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Caesars Entertainment Inc CZR

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Morningstar’s Analysis

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Caesars U.S. Gaming Demand Robust, as Digital Investments and Sales Ramp; Shares Fairly Valued

Dan Wasiolek Senior Equity Analyst

Analyst Note

| Dan Wasiolek |

No-moat Caesars continues to see strong leisure demand across its domestic casino operations, with Las Vegas (38% of sales) tracking slightly ahead of our estimates, and regional (56%) and digital (4%) both trending toward our expectations. We plan to lift our $106 fair value estimate by a mid-single-digit percentage to account for stronger Vegas sales and EBITDA, the time value of money, and incorporating $1.2 billion in proceeds from the sale of William Hill’s international assets (scheduled to close early 2022).

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Company Profile

Business Description

Caesars Entertainment Includes around 50 domestic gaming properties across Las Vegas (40% of 2021 estimated EBITDAR before corporate and digital expenses) and regional (60%) markets. Additionally, the company hosts international properties, which generate near break-even to slightly positive EBITDAR. Caesars' U.S. presence roughly doubled with the 2020 acquisition by Eldorado, which built its first casino in Reno, Nevada, in 1973 and expanded its presence through prior acquisitions to over 20 properties before merging with legacy Caesars. Caesars' brands include Caesars, Harrah's, Tropicana, Bally's, Isle, and Flamingo. Also, the company owns the U.S. portion of William Hill (it plans to sell the international operation in early 2022), a digital sports betting platform.

100 West Liberty Street, 12th Floor
Reno, NV, 89501
T +1 775 328-0100
Sector Consumer Cyclical
Industry Resorts & Casinos
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Distressed
Employees 54,000