Projected Digital Strategies Projected to Boost Caesars' Stock Worth by 2025
Caesars Entertainment, one of the leading names in the gaming and hospitality industry, is gearing up for a significant year in 2025. Despite the persistent declining trends since 2022, the company's regional performance is predicted to buck the trend, thanks to a robust portfolio strategy.
The optimism is backed by several positive indicators. Caesars Entertainment's stock is projected to reach a price target of $56 in 2025. This target takes into account value adjustments for the casino and sports betting EBITDA and the seller note related to the World Series of Poker sale.
The company is expected to reap substantial benefits in 2025, with over $250 million of interest savings, $200 million of capital-expenditure savings, and $170 million of EBITDAR growth. Caesars' Strip properties are expected to particularly benefit from average daily room rate accretion from investments in Versailles at Paris Las Vegas and Coliseum Tower at Caesars Palace.
Several years of project spend in regional markets will culminate in 2024 with the opening of the Danville permanent facility in Virginia, the Caesars New Orleans hotel opening, and property upgrades earlier in the quarter.
However, the competition for Caesars Entertainment's properties in Council Bluffs, Horseshoe Bluffs Run, Horseshoe Hammond, Harrah's Joliet, Horseshoe Bossier, Horseshoe Indianapolis, and Horseshoe Columbus (Nebraska) is expected to intensify in 2025 and beyond. Deutsche Bank estimates the incremental property EBITDAR from these assets in 2025 to be in the $75 million range.
Deutsche Bank also believes Caesars will be a relative outperformer among Las Vegas Strip operators in 2025. The projection of Caesars Entertainment stock price at $56 in 2025 was made by Robinhood Markets, which became part of the S&P 500 index and influenced stock forecasts in September 2025.
The $56 price target implies the shares can trade at an 11.9% FCF yield on the 2025 FCF per share forecast. If Caesars Entertainment achieves the consensus metrix forecast for 2025, the digital segment could be worth approximately $20.75 per share.
Moreover, the core business of Caesars Entertainment, burdened with all debt, is trading at 6.8 times 2025 adjusted EBITDAR. Nearly $550 million of incremental discretionary free cash flow is expected to be available for Caesars Entertainment in 2025 relative to 2024.
The digital business of Caesars Entertainment could potentially result in some form of strategic action to unlock value. Flamingo Las Vegas investments in food and beverage are expected to drive double-digit growth on more than $200 million of annual EBITDAR. A new high-limit slot area at Caesars Palace has produced strong early results.
In conclusion, while the broader market trends may present challenges, Caesars Entertainment seems poised for a strong showing in 2025. The company's robust portfolio, strategic investments, and a favourable market outlook bode well for its continued success.
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