Caesars Entertainment Inc (CZR)

Caesars Entertainment Inc (CZR) stock plummeted by 5.02% after Deutsche Bank adjusted its outlook on the company, reducing the price target to $59 from $62 while maintaining a Buy rating. The firm cited several challenges affecting Caesars' performance, including headwinds on the Las Vegas Strip, regional difficulties in January, a less profitable Super Bowl, and a subpar March Madness showing in its Digital segment.

• Analyst's Perspective and Valuation: Despite these setbacks, Deutsche Bank believes that Caesars' current valuation remains attractive. The firm acknowledges the pressures from the domestic macroeconomic environment and the company's leverage profile but considers the stock inexpensive based on historical and relative standards. Transitioning into a "beat & raise" narrative could alleviate short-term pressures and allow long-term investors to recognize the value and cash flow potential of the company.
• Forecast Adjustments and Upside Potential: Deutsche Bank has lowered its forecasts for Caesars Entertainment for the years 2024 and 2025. However, the new price target of $59 still implies a significant upside of approximately 40% from the stock's current levels. At this price target, Caesars' shares would trade at an estimated 11% free cash flow yield based on the firm's 2025 forecasts, compared to the roughly 16% yield at which it currently trades.