Analyst: Both Caesars’ iGaming app and stocks are an opportunity

April 25, 2023
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The B Riley Securities analyst believes operations are healthy and should improve with launch of competitive new app.

Caesars Entertainment’s stock and market options have been recently analyzed by David Bain, Managing Director and Senior Research Analyst at B Riley Securities. Though Caesars’ stock price has declined ~16% from 2/1 to 4/24, the expert opinion here is that this could be the time to buy.

First-quarter Las Vegas EBITDAR projections for the company are now $527m versus a consensus of $495m; B Riley says this is consistent with high performance in both group and leisure segments. The company cited inclement weather as a factor in the performance of Reno and Lake Tahoe locations; however, it says Caesars has since rebounded.

According to B Riley, “multiple storms dampened February and March visitation,” but the second quarter is so far yielding stronger occupancy, gaming and entertainment results. Now that the clouds have cleared, B Riley believes Caesars' stock should outperform peers in the relative NT.

Peers like BetMGM will see potential “under-the-radar” success from the rollout of Caesars’ new iGaming app in the third quarter. Bain called the app “a significant operational and strategic upgrade to Caesars’ existing offering, which should profitably increase its iGaming market share.”

Caesars has also taken its online slot offerings in both New Jersey and Michigan from "~350 games to ~500," and now plans for more game releases in Pennsylvania and West Virginia. The new app will also be separate from the current Caesars Sportsbook, allowing it to “funnel” traffic into iCasino games.

B Riley remained optimistic for Caesars’ upcoming year in Las Vegas, specifically, as he commented, “We understand investor enthusiasm surrounding the Macau reopening trade, though believe the Las Vegas market dynamic in the capital markets is slightly underappreciated.”

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